@Jacob Albright The mother in law suite certainly does add value but the challenge is that it is very hard to quantify that value as there likely aren't many recently sold homes nearby of a similar size, bed/bath count, and condition that also have a mother in law suite.

@Bradley Fogeltanz Start by quantifying your goals and which is most important--cash flow or appreciation.

Instead, the gains on the sale of property are taxed only once to the shareholder, and can then be distributed by the S Corp tax free to the shareholders"Since we would be looking for him to sell us the property now and not in three and a half years, we are looking to help the seller by quantifying this additional tax burden so he can make a more informed decision.Does anyone have a good CPA who specializes in real estate that they would recommend to help me with quantifying this tax burden?

The most quantifiable, though, would be the comparable sales in the area (in SoCal, many houses will be very similar so you can find very accurate price point estimates for ARV).

How do you quantify a bad neighborhood?

But we as experts should quantify our future tenant/buyers almost like a mortgage lender....or no...? 

We do make adjustments that we quantify in appraisals and it does depend on the neighborhood and the quality/condition of the improvements.

This may deter some applicants, as this is not a quantifiable metric.

If you can quantify your risks and account for them, you will likely be fine.

They offer great multiple buying the business but pound them on lease terms.Hopefully roof and structure is newer or you could have hug expense in the future.You do not have a NNN lease you have at best a NN lease or modified gross lease which is not as desirable because you can have UNKNOWN current and future obligations for expenses that are hard to quantify but usually a fixed lease rental schedule.Insurance might be high because building is older or it's a single policy versus a larger property owner that gets bulk discount pricing for adding another property to insure once a certain threshold is met.