Evaluating underperforming multifamily

[Cameron Hayes]

I am interested in a multifamily property, but I have no clue what it's worth. There are 3 buildings on site....1st building was built in the 1980s and has 8 units, 2nd building was built in the 2000s and has 8 units, and the 3rd "building" is a concrete slab, prepared for 8 more units. All units have been neglected by property management and need rehabbed. Obviously, the 3rd building needs to be constructed. Out of the 16 rentable units, only 7 of them are rented at $500/month. There are no records of expenses or any other way to determine the NOI. Once the property is rehabbed, the 3rd building is constructed, and occupancy increases to 95%, the gross rents will be $136,800/year.

So...how can I determine the value on this?

[Glenn Banks]

Cameron Hayes I can send you a spreadsheet to help figure it out. Slab is not a building, won't get you any income and is worthless unless you want to build on top of it. In short, you need data to determine value. Property manager should have rental data including vacancy, gross rents, any other revenue centers (laundry, parking, storage, etc), taxes, maintenance costs, deferred maintenance, etc.
You also need to walk through the property and try to assess condition and come up with a rehab cost to bring the occupancy back up to 90% as a goal. Also need to get rent comps in the area to project ARV and calculate CAP rates.