Hi
I am thinking of buying a fourplex for 164,000 the units are all rented with GI of 30,200, expences of 13,500 leaving the NOI of 16,700
I am trying to detrimen a fair asking price using the CAP rate { if I have it right from my reading}
NOI/sales price = CAP 16,700/164,000 = 10.18% CAP
What I would like to know is if I use NOI/12/CAP = asking price or fair market value based on current income?
16,700/12 = 1391.666 / .1018 = 136,705 my offer
or
should I take into account to add the 5% for vacancy, 5% repairs, and 5% Administration to the current expences of 13,500 which would now be 13,500 + 4,527 = 18,027 leaving new NOI of 12,173 and redo my offer
any suggestions?
Thanks
wayne58
I am thinking of buying a fourplex for 164,000 the units are all rented with GI of 30,200, expences of 13,500 leaving the NOI of 16,700
I am trying to detrimen a fair asking price using the CAP rate { if I have it right from my reading}
NOI/sales price = CAP 16,700/164,000 = 10.18% CAP
What I would like to know is if I use NOI/12/CAP = asking price or fair market value based on current income?
16,700/12 = 1391.666 / .1018 = 136,705 my offer
or
should I take into account to add the 5% for vacancy, 5% repairs, and 5% Administration to the current expences of 13,500 which would now be 13,500 + 4,527 = 18,027 leaving new NOI of 12,173 and redo my offer
any suggestions?
Thanks
wayne58