How do I value run down rentals

[Josh Ferringer]

I'm trying to get into real estate investing.

I live in a very depressed part of PA. I am struggling to understand how to value real estate that is bringing in rents well above what would expect the homes to be worth.

I can wrap my head around buying a vacant dump and renovating for an increase in appraised value and equity as well as rental income. But valuing established rentals is a struggle for me. I don't even know how to figure out what to offer.

For example I am looking at a package of two properties with three rentals and a small laundromat. An old house that would likely sell for 50k tops. Probably closer to 30k. However it is currently bringing in 550 a month rent through HUD. The laundromat averages 500 a month and the other two units bring in 500 each through HUD.

The building with two units and laundry is old,dilapidated and generally would not sell for much except it generates income.

How do I value these places to arrive at an offer price?