How to Value Multifamily with NOI as Moving Target?

[Brian Kraft]

Hey -- I'm keeping my SFR/Duplex buy and hold portfolio and heading into out-of-state multifamily, so I'm still trying to grasp various elements. I'm looking at a property now that has been mis-managed by some adult siblings, who received the building after their parents' death several years ago. The more responsible siblings have even more recently taken over management from the less responsible siblings, as they try to bring things back into order after a rough couple years.

They've provided me some initial number that cover their year until Nov 30, 2017. Based on that, there's a very, very low NOI (again -- poor management). Now, I haven't gotten any numbers from the last 6 months, but based on some conversations -- it's likely that an even more current snapshot of their NOI would prove to be better.

So my question is -- what's the typical approach for arriving at a possible purchase value -- as it relates specifically to capturing the NOI in time, especially if it seems to be changing somewhat rapidly? TIA!

[Michael Le]

Generally the T3 is the best indicator of trend and your lender will put most weight on those numbers. Why don't you have the last 6 months of numbers?