Assessing a Multi-Family Property's Value

[Kevin Hassold]

Hello BP,

I am looking to purchase my first multi-family property and I am unsure what is more important in assessing how much I should pay for the property. Should I base what I believe the value is for the multi-family property on comparable sales or on NOI x desirable cap rate? Or should both play a role and one has higher weight than the other?

Also, the listing price for the complex is based on NOI (as if it were fully occupied, but it is currently only 50% occupied) and a cap rate. Should I account for the fact that the actual current NOI is 50% of what they are basing their value on in my offer price? Should my offer reflect 100% of the current NOI x cap rate or meet somewhere in the middle?

Thanks for the feedback!