NOI listed is reflective of owner operated costs

[Glenn Gerisch]

I'm currently interested in a 20 unit garden apartment for sale that is listed at a reasonable CAP rate. My issue is that the property is owner managed and the NOI provided is based on expenses that would not be reflective of costs under a property management company. For example, the owner takes a fee that is half of the current going rate for property management and some family members are paid cash on the side for services and assistance. The Broker said the owner would not consider an offer based on my estimate of costs, even though they appear reasonable for third party management and services. Although the obvious answer might be "move on to the next opportunity", I'm looking for suggestions on how to justify my offer, or other strategies, because this is the fourth opportunity in a row that has the same issue. Thanks for taking the time to read this and offering any suggestions.

[Jeff Greenberg]

I have had many brokers tell me to submit the offer that works for me. By doing this they hoped that the seller will see what market price actually is. Something that the broker was unable to convince the seller of. Some brokers will tell the seller a higher price in order to get the listing. Then when the offers come in the seller may accept less. Make the offer. If it is very low, explain your justification to the broker. Even if you don't get that property, the broker will understand that you are a knowledable investor and understand your needs.