How do YOU determine the value of an investment property?

[Jonathan Wigan]

Cap rates, cash on cash return, 1% rule, value add, area comps... there are so many ways that investors decide what a "good investment" is. Do all of you put proformas together using some version in an excel spread sheet? I get the RR (rent roll) and the EXP (expenses from the previous year) then plug that info into a formatted excel spread sheet that has been with me for years and is one of the best tools I have. It gives me the cap rate, cash on cash number even the annual depreciation number which is so important for taxes. I can adjust the price and the spread sheet will change all the variables. The expenses I include are generally just taxes and insurance, landscaping/snow removal, janitorial and maintenance. I write all offers contingent upon the seller providing all financials (leases, cap improvements and usually 3 years of tax returns) within a certain amount of days of after acceptance. And as most multifamily sellers are all about "curb" offer only, I make the deal contingent upon a walkthrough of all units within a certain time time after acceptance. What's your method?