Having some fun...

[Cody Barrett]

Hey BP!

I enjoy learning about how to value and make offers on apartment buildings and I am trying to implement some new things I've read about.

I drove past an awesome looking apartment building on the Northside of Racine. Its 28 units. Family owned building operating under a LLC and they have multi-unit properties in Milwaukee, Waukesha, Jefferson, and Racine. The building is not for sale but I thought I'd try to slap some pro forma data together for fun to test drive some stuff I learned. Who knows, maybe give the owner a ring sometime.. (that would be a 1st for me, ha)

Anyway... 

The tax assessment reads $106,600 for Land and $1,293,400 for Improvements with a total assessment at $1.4 million and the taxes are paid up with a recent payment of 43k.. The building only has 1 unit available for rent right now (1bed1bath 750 sq ft for $750/month)..

2 questions: 

Would the next step be calling commercial brokers to learn what the CapRate would be for similar buildings that have recently sold in that area?

I am guessing to get more information to estimate a true value based on NOI I would have to call the owners. But how influential is the tax assessment of 1.4million in determining the value of the building? Their actual yearly income/expenses is critical to obtain but I don't think owners just give that stuff out.

Thanks everyone! Definitely a lot of fun trying to solve the puzzle!