First Deal - Need advice

[Ryan Shannon]

Hi BP community, I am new to REI, so need a little assistance. I have found what I think could be a great deal on a 4-plex in Georgia, but need help on how to determine the value. Three of the four units are currently rented for: Unit 1: $700, Unit 2: $890, and Unit 3: $890. The fourth unit is not rent ready and would require at least $20,000 to get it there. The sum of the 3 units is $2,480 and after repairs the 4th would rent for $1,300 (median rent of comps in area per rentometer) totaling $3,780. Units 1 and 2 are identical 1 bed and 1 bath, roughly 500 sq/ft each. Units 3 (3/1) and 4 (3/2) have different layouts but the same sq/ft of 1,300.

Unit 1 Current = $700 Potential = $890

Unit 2 Current = $890 Potential = $890

Unit 3 Current = $890 Potential = $1,300

Unit 4 Current = $0    Potential = $1,300; After $20,000 in rehab

Current Rents = $2,480   Potential = $4,380

Potential Gross Rent = $4,380; Monthly NOI = $2,890.60

What is a fair price to offer the owner based on current and potential rents but needing $20,000 in rehab?  I am shooting for a cap rate between 8.75% - 10%.  Just based off the raw numbers without factoring in the rehab, I would offer around $350,000. Should I just take the rehab right off the top and offer $330,000 or is a more complicated calculation required to make it mutually beneficial?   I know making an offer based off potential rent is the wrong answer, but using current rents for units 1-3 and assuming $1,300 for unit 4 still puts my cap rate at 8.33%.  

I appreciate any and all help.  Thank you.