12 Unit MFH Deal, 2 units to be added

[Michael Kay]

Hi!

I found this great little deal of an apartment building in a major metro area. I figure the units are renting for $2300 each (it's in my neighborhood), down the street from me). 

Building's cap rate is 4% which is the normal for the area. Total deal is around three and a half million. I don't know what the status of the plans (other than 'approved') or the 2 extra units that are proposed to be built.

If I'm understanding things correctly, those two extra apartments will bring in $2300 * 2 per month  * 12 per year/ 4% should give us $1.3MM extra value?