How to value multiple rental properties w no written lease

[Tracy R.]

A man in my hometown passed away and had rental property that he owned outright. Some of them are now owned solely by the widow, and some are owned jointly by the widow and 2 of her adult children.  This would be my first investment property purchase, but after I made my desire known to purchase them once she was ready, she has come to me first.

The widow wrote down what each of them pays each month, so that’s all I have to go on to try to value them and come up with an offer price.  

Supposedly the tenants pay on time, but there are no written lease w any of them (and never have been!).  They are also paying significantly under market rents, since the husband never raised any of their rents for decades.

She's not yet told me what she thinks they are worth, but I will ask that question in our next conversation.   I know I will also need to talk to the tenants to see if they are actually paying these amounts, plus do a lot of other due diligence too.

I believe this could be a good opportunity to buy them when they are not anywhere near market rent, and also not fully-rented out (3 vacancies out of 15 units), and then get them rented out and also move gradually to market rent.   The husband also had grass mowing included in their rent, plus had the 3 duplexes and 1 triplex all on one meter per building, so I'm looking into getting them submetered to be able to bill that back for what each unit actually uses.

But I’m having a hard time figuring out a “rule of thumb” on what the value is today based on the current income, to try to give her an offer, plus try to get a loan on them.

If anyone has any tips or feedback on how to do begin to value these properties, I would so appreciate hearing from you. I can give more details also, if this is not enough.  Thank you!