Seller wants 950 for an 11-unit collecting 7,850, and my number is due this week

List it in-place with the upside footnoted and let the market argue. Any buyer serious enough to get a commercial loan is rebuilding your NOI anyway and they'll find the two 400 units in the first week of due diligence. The ones who won't find it are the ones whose lender kills the deal at appraisal, and then you've burned four months.

What I'd actually do about the brother-in-law: tell the seller to serve proper notice and get those units to market before listing, or price them at 400 forever. A buyer discounts an occupied below-market unit harder than an empty one, because the empty one he controls. Notice requirements and what counts as a valid termination vary by state, so that's his attorney's call, not yours.

The vacant unit since spring is the one I'd ask about. Six months empty in a market where renovated ones go at 950 means it needs money or it's storage.

Buyer side here, and the footnoted version is the only one I'd read past page one. If I see a pro forma cap rate on the cover I assume the whole package is marketing and I discount everything in it, including the parts that are true.

The listing you win by overpricing costs you the relationship you'd have had, which is the thing you're circling. I learned that the hard way after five years living off other people's referrals. He'll blame you for the reduction, every time.

What's worked when I've been on the vendor side of a mispriced asset is a written pricing memo showing both numbers with a bridge between them, line by line, and making him sign that he's read it. Then if he insists on 900, you list at 900 with a 60 day review date already in the agreement. You've documented the argument and you've built in the reduction as a scheduled event rather than a failure.

But Flint's right that fixing the two 400 units before listing is worth more than any pricing strategy. That's 1,100 a month of found income, and at 7.5 that's about 176k of value for the cost of a lawyer and some awkward family dinners.

The structural point in your spread is that income-based valuation means the seller's mispricing has already cost him the value, and a buyer paying pro forma is paying the seller for work the buyer has to do. That's why in-place pricing with documented upside is the standard approach on small commercial listings, and why sophisticated buyers rebuild the operating statement rather than reading the summary.

A few mechanics worth being precise about. Collected income and scheduled rent are different lines, and lenders and appraisers generally underwrite from collections with a vacancy and credit loss factor, plus a management fee whether or not the current owner takes one, plus a replacement reserve. Your instinct to add 4 percent for management matches how most underwriters treat a self-managed asset, though the figure varies by market and lender. Confirm what a specific lender will use rather than assuming.

On your comp read: sale prices are public record in most states, but roughly a dozen states are non-disclosure and do not make transaction prices publicly available, so if you are in one of those your cap rate range is coming from broker networks and confirmations rather than recorded data. Say so explicitly in the memo. It changes how much weight a buyer should put on the range.

What you can and cannot represent about income in a listing, and what disclosures you owe as a licensee, vary by state and by the terms of your listing agreement. That belongs with your broker of record and, if the numbers conflict this sharply, with counsel.

The assumption doing the most work in the 953k number is 5 percent vacancy against an asset with a unit empty six months. National apartment vacancy has been running near 8.5 percent, and a buyer will notice.