How to evaluate a large complex in NY- 30 unit + Store

[Richard Decoste]

I am looking at a large multifamily in ny. How do you evaluate value? Use comps? I don't see any. I looked at findcompsnow, redfin, zillow. I see a list price for $3,000,000 and I want to know how he arrived at that value.

[Giovanni Isaksen]

@Richard Decoste I would be less concerned with how the seller came up with a price than determining what the property is worth to you as an investor. What are the reasonably projected benefits of the property's cash flow, tax benefits, amortization of debt and appreciation? How much are you willing to pay for those benefits in terms of purchase price, acquisition costs and immediate capital improvements? How much leverage risk are you willing to take on in order to acquire the property?

I highly recommend reading Frank Gallinelli's "What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures" http://amzn.to/Zv0Zph (on Amazon) to understand how to measure and analyze the financial performance and returns of an income producing property. There are more good books on income property but I would start there.

Because it's a mixed used property with two retail spaces reading and understanding the terms of those existing commercial leases will be critical to determining the value of this property. If you are not experienced negotiating commercial leases I would definitely engage a broker who is to review that portion of the deal.

Good hunting-