Pricing Vacant Commercial Property

[Richard Jr Caicedo]

Good evening bigger pockets! I have a question I can't seem to find anywhere online.. I have found a 6 unit apartment that has been vacant for quite some time now. I have been trying to run some numbers but its extremely difficult without knowing any cap rates. I understand the formula for a cap rate but how am I supposed to know what I should offer on the property without the most crucial information? Anything would be greatly appreciated, thanks!

[Gwyeth Smith]

@Richard Jr Caicedo, first thing I would do is to figure out your goal with this project (i.e. 12% cash on cash return by year two (just an example)).  Echoing what @Chase McArthur said, you will probably want to run some projections.  What will your total project cost be to get all units rentable?  Figure out that timeline and then what you can expect for revenues and expenses.  At that point go back and start plugging in different purchase prices into your model and find the one that meets your goal.  Use that number help come up with an offer price.