How do I determine the offer amount for a fully renovated buy and hold multifamily unit with tenants in place?

[Mala S.]

I sent out about 200 yellow letters last week and another 300 this week and the calls have started rolling in!

I am totally psyched! I love talking to people about their properties and listening to their situation. Most have not been very motivated but I did have one caller who is motivated - an out of state owner who owns the property free and clear.

I have read and heard a lot from investors who flip properties in my area about how you should make offers that are 65% of ARV - repairs - wholesale fee. But I don't think this property fits into the fix and flip model.

So what are some rules of thumb determining the max purchase price an investor would consider for a buy and hold multifamily with good (according to seller) tenants in place?

Here is the property info:
(mind you this is all info from seller, i have not seen the place yet)
The property is a 2 family house that was moderately renovated this year (kitchens updated, new tile, painting etc.)

1st floor - 3 br apt, renting for 1100,
2nd floor - 4 br apt, renting for 1200.
additional 2 bedroom apt in basement (not legal) and not currently rented.
Taxes are $8400.
40 min commute to Manhattan via path train. 20 mins drive to manhattan. In a good neighborhood in Jersey City near a park.

The current rents seem really on the low end IMO for the area. But again, I haven't seen the condition of the place yet.

I have heard of the 2% rule for buy-and-hold properties (rent should be at least 2% of purchase price), but that is a really tough thing to achieve in the new york/ new jersey area. In addition, how are the high property taxes in new jersey taken into consideration when determining the max purchase price that an investor would consider for this property?

Any advice would be greatly appreciated!