Multi-families commercial property

[Long Vang]

can anyone give an example of how to estimate the cost or price of a commercial multi-family propery. I know that the price is based on the current rent or potential rent, but how do i estimate the end price from the information?

[David Thompson]

Long,

Simply, its NOI/cap rate = FMV. You need to do your own analysis on what the revenues and expenses are today and what you expect to see over the next 5 years in your modeling using conservative assumptions. Don't use the proforma given by the seller. As Joel, mentions many factors but understanding your market well will help in putting these numbers together. Expect cap rates to rise to some extent. If they don't great but if they do, you've built in some conservative exit number to see if you can live w/that.