How much to offer on a small MF?

[Kimberly Ashkenazi]

Hello! 

I am very interested in a small MF that has a fair amount of deferred maintenance (about $40K). How much should I offer?  I can think of two strategies:

1. Should I use the flip formula? ARV * X% - repairs? Not sure which % would be best to use, since this is a buy and hold.

2. Whatever max purchase price maintains the 2% rule - repairs.  Current gross rent is $2100, which could definitely be pushed to $2400 after repairs.  This leads us to a PP of $105K (based on $2100) - $40K repairs = $65K.

What do you think? Any other suggestions?