1)get the Capitalization Rate for comparable recently sold properties in the area.
2)multiply (x) the CAP RATE by the VALUE of the property to determine the NET OPERATING INCOME(NOI) that would be needed to justify the price.
EXAMPLE: a CAP RATE for comparable apt. complexes is 12% or .12 and the asking price for the complex under purchase consideration is $300,000
$300,000 x 12% = $36,000 in NET INCOME that would be required to justify this asking price, CLASS DISMISSED, SULLY
YOUR HERO, SULLY