Multi family equity?

[Nicholas Rickman]

My understanding is that an apartment buildings value (5 units or more). Is based on there income, not comps. So if someone has a building that a percentage of there income is down because of covid moritorium allowing people to live rent free. Then in theory this is going to drop value of building, correct?

I would like input in how people may think that this is going to reflect on market.

[Ethan Wagner]

@Nicholas Rickman Nick, in theory yes, but not by too much. With that said, I think it is a question of how long the moratorium will last. We all know it is going to be temporary. Using a DCF model, you can project out hightened rent collections for a period of time, say a year. I surely wouldn't use a direct cap model to value the building based on in-place collections during a moratorium because that reduction in income is not perpetual.