One of the biggest questions sellers have is: “How do you come up with your offer?”
Market Value vs. Investor Value
- Market Value: What you might get if you listed with a broker.
- Investor Value: What buyers like us calculate based on income, expenses, and return goals.
Key Factors in a Cash Offer
- Rent Roll: What the property is earning now.
- Vacancy: Are all the units occupied?
- Operating Expenses: Taxes, insurance, repairs, and management.
- Deferred Maintenance: Cost to bring the property up to standard.
- Cap Rates: Market-driven return thresholds.
Example: 10-Unit Property
- Gross income: $150,000.
- Expenses: $50,000.
- Net operating income (NOI): $100,000.
- At a 6% cap rate, value = ~$1.67M.
- Adjust for repairs or vacancies, and the fair cash offer might be closer to $1.5M.
👉 Final Word: A reputable cash buyer explains the math—not just the number—so you know exactly how your offer was calculated.