Offer Price on Commercial Multifamily Property

[Akyl-Lateef Hewitt]

When putting in an offer on a commercial apartment building. How do we receive our offer price? My partner and I are doing an analysis on how much to offer on a commercial apartment building. Our analysis consists of the NOI on the target property and the comparable cap rates in the area. Are we correct in our analysis? Also, is there room to re-negotiate during due diligence, and on what basis?

[E. C. "Stony" Stonebraker]

@Akyl-Lateef Hewitt, you should underwrite the deal correctly and determine a maximum offer price from your underwriting.  Then, you can determine an initial offer price.  To learn how to underwrite, I recommend you check out Rob Beardsley's excellent book and free model here. All offers should have contingencies for findings that have a significant effect on your offer price. I recommend you attend local REI meetups, speak with more experienced investors and consider bringing in an experienced and trusted partner to help with your first acquisition.