Confused - Priced based on after stabilization

[Charlotte Dunford]

I have been analyzing a number of 150 + units apartment deals. I have gotten a little confused with how these properties are priced. I use their current financial performance (NOI for the past year), and the cap rate in the market, to determine the value of the property. And that's the basis for my offer price. I sometimes offer higher prices if it has some upsides. However, my evaluation of these properties often come at $1.5 - $2 mil lower than what the broker/seller is asking for. Am I doing something wrong here? The most confusing part is that they always try to sell a "value-add" property to you at a price for an already renovated and stabilized property, essentially asking you to pay for things that haven't happened yet. Any suggestions on how to overcome this challenge? Many thanks.