Alaska Multi family commercial deal evaluation

[Trevor Burns]

What should I expect for Cap rate c class multi-family in Fairbanks, AK? I am trying to set my value for a 6 unit property that should rent for $6000-6900 but is currently only renting around $4900 as one of the unit is getting remodeling. The property has been well cared for but under managed for some time. It has a long history of a least one unit vacant in the past few years(not market driven). The building was new in 1975 and has some updated throughout but it does not show as new and current. Boiler is around 12 years old. Owner is open the lease option or owner finance. -I am calculating cap rate at 10.5% -Cash flow $1300ish (rent dependent proforma) -utilities avg $1000-2000 throughout the year -asking price is $365k

[Jeff B.]

Use the existing rents for evaluation - - they're real and all your marketing may not yield improvements.

If there's known vacancy issues, then adjust the the GSI (sum off all rents * 12 months) and subtract the loss rents from vacancies (number of units vacant * average rents * number of months their empty) . Call that your NET SCHEDULED INCOME and resume your evaluation.