Evaluating an empty multifamily

[Lorene Fleming]

I understand the concept of making an offer on a mf based on NOI and expenses and the cap rate; however, in the event of an REO mf that will be empty - if not @ coe than not that long after - but still non performing. There has to be a value for the property, how does one go about arriving at it?

I asked the RE agent what the going cap rate in the area was and he said that there has been very little inventory in general and no apt buildings for sale lately to get a firm answer, but he guessed about 6% stabilized. This apt is far from stabilized and it is going for 11 cap using pro forma numbers.

Assuming he is correct, how would we come up with a reasonable offer price? I appreciate any advice I can get on this. Thanks in advance.