Analyzing a 50-unit apartment- "The 1% Rule" ?

[Pete Edmonson]

I have an opportunity to purchase a 50 unit apartment, along with 7 other SFR properties (14 doors total for those) from a retired old-school RE investor. He keeps telling me that he used to buy his properties using the 1% rule, and wants to sell them as such. His explanation of the rule is: If gross monthly rent on SFR is $1,000 ~ House should sell for $100k. If his 7- unit brings in $5,000, he wants to sell it for $500,000, and since the 50 unit apartment brings in $28k gross rent a month, he wants to sell for $2.8 million. I'm in the process of analyzing the apartment financials to make him an offer. But I don't know enough on how to analyze apartments to counter and negotiate. Like I said, he's very old school, has no debt on all his properties, and I know him well enough to know he's not out to swindle me. I can analyze SFR all day long, but very green in the apartment arena. It was a 5 year goal to move in that direction, but this opportunity presented itself 4 years and 3 months early. Any suggestions for analyzing?