Determining Property Value

[Mike Keever]

Hi All, I have a question regarding determining potential Property value based on CAP Rate. I'm analyzing a property in Southern California that is a 60 unit apartment complex. It's currently 100% occupied and shows about $1.3m in annual income with an NOI of about $621k. Based off my research I was thinking NOI ($621k) divided by CAP Rate equals potential Property Value...if it's a 5 Cap location that equates to about $12m...the seller is asking $22m which to me seems the broker is dividing the Gross income by Cap Rate..any input to clarify would be great. Thank you in advance for everyone's input!

Best,

Mike

Orange County, CA.