Large Multifamily - market cap rates vs NOI?

[Ashton Levarek]

This seems like such an obvious question but basically I'm looking at market cap rates and based off of the current NOI, and often even off of the projected NOI, properties are just not projecting returns even close to what investors (like myself) and mortgage brokers would want to see (DCR 1.25%, CoC 9%, IRR 15%). (Buying using current NOI to establish property value does not produce an offer even close to what sellers want to sell at because sellers look at market cap rates to determine the right sale price.)

But if I adjust the purchase price to reflect the market cap rates, adjust the value to reflect projected NOI, and then adjust the RESALE price to a similar cap rate (reflecting the current market cape rates), well then it works.

But the issue I have with that is that now it seems that I am purchasing based on speculation of what it could preform at as well as what it could sell at. And while it is very likely that I can get the property to preform at the projected NOI - the cap rates I'll see in 3-5 years, when I sell, will not be something I can control. And this will ultimately affect my CoC/IRR/AAR.

Thoughts? Suggestions?

Looking forward to your input.