8 unit Multi family

[Adam Kerr]

Hello I'm starting to negotiate on an 8 unit apartment in Minnesota that is owner managed and maintained. (He does the Lawn Care and snow removal also.)  Someone told him the cap rates in our area are 8.18% witch might be right but in finding the value now he hasn't accounted for vacancy, property management, etc.  Should he be figuring that in to figure out the value like I do? Thanks

[Tchaka Owen]

@Adam Kerr - if he knows how to calculate Cap Rate, he should know about all the important components. What matters most is that you decide what it's worth to you go from there. Show him your calculations. If he has different numbers, ask to see how he got his numbers. If he skipped anything, have him add it. Just because he chooses to do work and pay himself with the saved amount doesn't mean every other investor will do so. Time for you to be the teacher!