Valuing 2-4 Unit Properties Based on Rents

[Eric McAvoy]

Hey BP team!!

I've got a quick question for you guys. I'm looking at house hacking a 4plex in the coming months and the one I want is priced reasonably but the rents are way below market rent. 480k purchase price and $825 per unit but the area could easily get $1100-1300 per unit with some minor renovations.

With that in mind, is there a way to use the low rents to help bring down the purchase price? I know there are ways to get a value based on the rents but I can't figure out what it is. I've been looking into cap rate and NOI but most of what I can find is telling you how to find those numbers vs being able to get the value of the property based on the current rents. I think the seller is selling it based on what it could be, but I intend to pay for what it is, not what it could be.

If anyone has any insight as far as how to get a value of a property based on the currents rents that would be awesome!!