Advice on valuing and negotiating a 9 unit motel in South Florida

[Chris Myatt]

Hi All! 

I'm looking for some advice on valuing and negotiating a purchase of a 9 unit motel in South Florida. My father and I are speaking with a seller on purchasing a 9 unit building. We've just found out that the seller is asking 1.8M for the building. The motel hasn't been updated since the 70's. The current business income does not support the asking price. I would estimate that we will need to spend about 450K to get the building in great shape. The property has been well maintained, it just still looks like the 70's. I would estimate we can get about 250K in income per year from the 9 units once fixed up. 

The seller isn't hurting for money and is willing to self finance a good portion of the sales price. We haven't asked the seller how they came to the asking price, we literally just had a meeting this afternoon and did a walkthrough. 

Does anyone have some advice on how discuss and negotiate the price? Any ideas on some creative ways to make this deal work for both the seller and us? How would you value this property?

Any ideas and suggestions would be greatly appreciated!