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Updated about 6 years ago on . Most recent reply
Determining Apartment Value
Good day everyone! I am looking for some tools to determine the worth of a apartment complexes. I look for mostly 8plex and higher. I am analyzing an 87 unit complex that is publicly marketed. However no set asking price is provided. I want to determine a good offering price. Does anyone know of a good formula to determine value?
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#2 Multi-Family and Apartment Investing Contributor
- Rental Property Investor
- St. Paul, MN
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#2 Multi-Family and Apartment Investing Contributor
- Rental Property Investor
- St. Paul, MN
Short quick way is determining the Net Income (Income - Expenses) and then dividing that by the prevailing cap rate in the market. So if the NOI is $200k and the Cap rate is 5%, then the property is worth $4mm.
There is so much more that goes into this though and it would take a book for me to explain... maybe I'll write one, but for now, read Michael Blanks new book or Ken McElroy and David Lindahls books.