Evaluation of Multifamily Foreclosure

[Rand Linton]

Total newbie here. I've been looking at a multifamily complex that has been foreclosed upon. I am aware that multifamily properties are purchased based on NOI and the applicable cap rate for the market. The information provided to me by the listing broker indicates that for the prior 12 months, the NOI is negative to the tune of several hundred thousand dollars. However, when taking the most recent month's performance and annualizing it, the NOI then becomes positive by several hundred thousand dollars.

My question is how do I properly evaluate this property? Several of the units have recently been renovated (according to the listing broker). The capital expenditures and repairs/maintenance figures are high for the trailing 12 months, so I suspect the broker would argue that the reason for the negative NOI is due to recent renovations. Any and all thoughts on how I should go about evaluating this property would be greatly appreciated.