Tommy Dobczyk analyzes a Class C apartment building with $1,400 rent per unit and a 6.5-7% cap rate. At a 6.5% cap rate the property values at $2.6M, well above the $2.3M asking price, but the deal breaks if actual NOI drops below $152.
Pretty close. It says that it's the assumed rent is $1,400, but I don't know why it's assumed if you gave it the OM. So go ahead and keep rolling through that. Let's see what it says. Cap rate becomes 7% and the DSCR is 1.3% with a, I think it was a 60% LTV. I believe so. And so it shows your sensitivity test right here with your rent assumptions and all that. So price check for a multi, uh, Class C multifamily. You can see that they're trading about $160 a unit. So the Class C cap rate usually about 6.5 to 7. The listing shows at $156 per unit. So it doesn't say it's crazy on the surface, but at a base NOI of $169, the valuation method shows that a cap rate of 6.5 has the value at $2.6, but a 7 cap has it at $2.4. So a current asking of $2.3 says there is defensible, but if the real NOI is below $152, then they need to readjust the price again. So keep going.
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