How Would You Value A Purchase With 4 Months Likely Vacancy?

[Patrick M.]

Okay, I think I've found a good property to target in my college town.  Here are the details:

Property: 4 br / 4 ba unit, 1250 sq ft, in MF complex with individual lock-able bed/bath suites

Rent: Currently $1600-$1700 in identical units

Target purchase price: $135,000

Monthly HOA Dues: $200

Prpty Mgmt Firm: $165 (10%)

Monthly Taxes: Approx. $200

I have access to financing with no PMI at 3.25% through the credit union. My credit score is above 800.

When I run my spreadsheet, this seems to have roughly a $100 per month clear on the door, so I'm interested. Here's the timing issue: it's presently vacant. We're approaching mid-February in a college town. Everybody who came for the spring semester already arrived, and nobody will be here for the fall semester for months.

As I peruse other units being marketed for when the current tenants move out, unsurprisingly, they are all June/July/August. Leases seem to be 12 month everywhere.

If you were making an offer, would you start with what you consider a fair offer (i.e. $135,000) but then work back from that number to the amount the empty months would depreciate the price? As an example, if I closed on April 1, I would still likely have 3-4 months vacancy on the mortgage before I had a tenant under lease in July or August. This means I would back out $4800 to $6800 and offer $128k to $130k.  Thoughts?