For the most part we run credit and ask for taxes to verify identity.

If you're familiar with finding the net present value (NPV) of future cash flows, it is nearly identical- determining what to use for the annual cash flows becomes the important part.

A well designed direct mail piece clearly communicates YOUR IDENTITY (including a photo etc), the seller's PROBLEM (so they can identify with it) and your SOLUTION (what you have, why it's the best solution to the problem, why you are the best of ALL THE PEOPLE OFFERING THE SAME EXACT SOLUTION).

However - if this is a nice area, and the units are identical, the rent on the one side is way low.

If you are looking in a cookie cutter addition where every house is basically the same and all of the houses are within a few years of each other finding the market value is simple you just look at what identical properties have sold for over the past 12-24 months.Moving out of the predictable additions makes the process a little more difficult however if you are looking in areas where a majority of the the homes are being bought by owner occupants the process is still relatively simple.  

For instance, assuming you have 2 identical properties (hypothetically, but I have seen this quite often in new subdivisions where owners build the same model but some add a basement) one with basement and the other without basement.Property without basement:  3,000 square feet selling for $300K, or $100 per square foot.Property with basement:  identical 3,000 plus 1,000 basement, for a total of 4,000 selling for $450K.  

There are of course hybrid deal structures and other circumstances that make no one deal identical to the other.  

My current property has three identical floors (about 400sq. ft each), and I'm also living on one of the floors.

(b) If the records of a series are maintained in a manner so that the assets of the series can be reasonably identified by specific listing, category, type, quantity, or computational or allocational formula or procedure, including a percentage or share of any assets, or by any other method in which the identity of the assets can be objectively determined, the records are considered to satisfy the requirements of Section 10A-5A-11.02(b)(1).

@Will Barnard Thanks Will there is actually an identical thread with a lot more activity on it.