How do you base your offer (Re: Pro Formats)

[Dustin Beam]

Hello beautiful people of BP, 

Sorry for the auto correct in my title, I can't fix that, but "Re: Pro Formas" 

I hope to be in a position to buy a smaller (10-15 units most likely) apartment building in the next 6 months. My first purchase was a 12 unit (3 fourplexes to be precise), but that was a different situation. Totally off market so I could and did go directly off rents at that given time. Plus, it could have been viewed as non-commercial, so the same refinance rules may not have applied to what I'll be doing next. 

At the moment, I'm reviewing pro formas, typically what is on a broker's website. The question I have, how much do you base your offer on what current rents are vs how much they could go for. Obviously, the selling broker loves to point to how much it could go for and base the purchase price on that. I personally will always expect a nice discount if I'm going through the effort of repairing the building and raising the rents. 

But what do you more experienced investors do? Only offer on current rents? What the rents could be? Somewhere in the middle? 

FWIW, my goal is buy at a price where I can add enough value to a level where I can pull most of my money out w/in a year or so via refinance.