Need help with purchase price **12 units and 55 storages**

[Dustin Hood]

Hey guys, Been following bigger pockets for a few years now but this is my first post. I currently own 29 multifamily units located in Southeast Texas. I need help from you guys determining a purchase price for a property. I have someone who's going to owner finance me their properties. She's selling an 8plex, 4plex, and 55 storage units. I realize it's hard to determine price without y'all seeing the properties, but they're all in above average condition. I'd call them B+ class. Here's the breakdown: 8 plex is 4 2b/2b, and 4 2b/1b. Gross monthly rents are $7,200/month 4plex is all 2b/2b. Gross monthly rents are $3,000/month. 55 storage units are fully rented grossing $3,500/month. Again, I know it's hard to come up with price based off just numbers but hoping for some help. Th seller has recently inherited these properties and so she wants me to come up with my purchase price. She's not going to be fooled and understands the market is high right now, so it has to be a fair offer. Based off the rental income, let me know what you would pay for them. Thanks guys! - Dustin

[Scott Meyers]

Dustin, 

I have replied to and have written several threads on valuation here on BP.  If you do a search for my name, you'll see dozens of them.   

Here's the skinny: Now that you have an NOI, dividing it by an acceptable cap rate for the property will get you in the Ballpark.

Now, what's acceptable?  As you know, it varies based upon the market, and the property - A, B, or C.   Right now, we're using a 9.0 - 9.5% cap rate on trailing 12 financials to arrive at an approximate purchase price, all things considered for the Class C Properties we're pursuing.   Assume an 8.0 to 8.5% Cap for a Class B.   

And Before all the Novices start challenging me on this, there are a LOT of factors, and many variables to consider before simply drilling down to 1 Number: DO you have ALL the income and expenses accounted for in the NOI, is a 9% cap the true value, or do you start by offering an 11% cap for negotiation.....

So, without a 15 page discertation, (that's why I wrote my course) I've given you the ball park to get you close. 

Good Luck,