But, as in your case, if there are no recent similar sales, I would look at the available sales and pick those which represent my Subject's important specific characteristic, in order to essentially build a model of the Subject. 

Hey guys I just spent the last several days creating a financial model in excel.

Let's say I have LP investors and upon refinance I pay back their initial equity contribution.

I suppose I'm scratching my head on why this business/fee model hasn't taken off more.

The Vernon Hill model is very much centered around customer-service.And I've updated my profile with my current location of West Orange, NJ.

Accredited investors (who used to own turnkey rentals) all laugh how they wished they got out of owning rentals sooner.Why would you want to be the direct owner... better to move to LP with no management headaches, not having to optimize equity with refinances in the future, little to no liability, and no debt in your personal name... and no crazy tenants :PIf your net worth is over 500k, I can't really find a good reason to buy a rental property.

Interest rate hikes are shrinking the pool of buyers in that market however.My question was in the markets we are very familiar with, why would people be clamoring to buy a property that is in the B or C area (working class), has little room to drive rents up (plenty of other options) and is negative from day #1 if the sole purpose of the property is rental (multi family).Will listen to your podcast but this was more of a curiosity question as we have our criteria that we stick to and the model seems to have worked.

In the deal we are investing in, the difference to most other deals is the ability to benefit from the difference in the building costs and the actual value at the point of completion.If you think of the traditional turnkey model, you will see that the TK provider will find the "ugly duckling in a nice B class neighborhood", let's say for $40K, put $60K into it to renovate it to a really nice standard and then sell it to you and me for $135K.

Nathan,If you are serious about this, I think you should look into the business model of companies already doing it and consider doing it from the sponsor/GP side and retaining an ownership stake instead of being an LP in a deal. 

Hopefully, the recession will reduce labor and materials costs but the business model is not dependent on it...it's dependent on the first sentence.