14-Unit Multi-family - How to figure out value for price point?

[Allan Smith]

Looking for help on figuring out what this complex in Nashville, TN, is worth so I don't over pay. I will likely syndicate or wholesale the property.

I don't know standard cap rates for the area, but the area is Madison, TN, which was historically low-income, but houses are being rehabbed and rents are going up as affordable housing within 15 minutes of nashville is slowly disappearing. Here's what I know:

Seller uses 2 2-br units, and rents 2 2-br unites and 10 1-br units. She claims her net income was $97k in 2016. Seller is asking $925k but isn't particularly motivated.

• gross monthly income is about 8900 with section 8 tenants mostly.
• property in great condition except for old aluminum windows and parking lot is a little beat up.
• Taxes $10k annual
• Insurance $4300 annual
• Let's assume $15k maintaince annual
• Assume $15k capex
• Assume 8% vacancy

That puts her current cap rate at about 5.7%

Value-add cap rate after we purchase, by renting those two unused units, goes up to 7.6%

What can I pay for this place?? Thanks everyone!