Please help me get realistic value of 24 units multifamily build

[Jaydeep Deda]

Garden style apartments with off street parking (no covered parking)

Building Attributes: Exterior Walls are Brick/Masonry and Pre-Fab Wood 

Land 2 Acres

Total Units: 24 (1 bedroom- 18 units; rent $850) & (2 bedroom- 6 units; rent $950)

Taxes $40,000/year

Amenities None

Facts:

What I like about this property is owner was a builder who built it in 1970, he passed it on his son in 1993 (son must be in late 50’s). So family built and owned. Well maintained, might require minimal updating.

Current owner is unsure if he wants to sell and wants to get realtor involved (I am assuming he wants to find out current market value and have smooth transaction)

How should I go about convincing him? Also, what would be considered a fair market value for such kind of property so that I am prepared before I offer.

Please let me know if I am missing any information.

[J Scott]

To determine fair market value:

1.  Figure out NOI
2.  Determine Cap Rate for similar properties in that area
3.  Value = NOI / Cap Rate