Valuation of a property management company the manages 2nd homes?

[Aaron Tarnow]

I am looking at purchasing a property management company the exclusively manages 2nd homes.  They perform weekly home inspections for a base rate, then have add-on fees for additional services.   The seller of the company is using a 3.25x multiplier of the last two years adjusted earnings. He knows this is higher than the multiplier for a standard management company.  I asked for an explanation of the valuation, but am not satisfied with the response.  

At the current asking price the income is not enough to cover the loan.  Is there something I am missing in the calculation?  If so what would be a more realistic multiplier?   The seller is asking for 500k on about 154k of adjusted earnings. Why should this type of management company be worth more?