How much to offer on a small MF?
Hello!
I am very interested in a small MF that has a fair amount of deferred maintenance (about $40K). How much should I offer? I can think of two strategies:
1. Should I use the flip formula? ARV * X% - repairs? Not sure which % would be best to use, since this is a buy and hold.
2. Whatever max purchase price maintains the 2% rule - repairs. Current gross rent is $2100, which could definitely be pushed to $2400 after repairs. This leads us to a PP of $105K (based on $2100) - $40K repairs = $65K.
What do you think? Any other suggestions?