Good question. As mentioned I wouldn't buy, therefore don't have a figure in mind. But if I were hypothetically considering such an action, "due diligence" would be paramount.
I would enquire as to what the maximum exposure to litigation losses might be. Hard to determine, I know, but get a best estimate.
Are there any other potential exposures (ie., liens) that might jump up and bite you?
I would enquire as to how the rental revenues are calculated and allocated. Is there a "rental pool" in effect, or would I get revenue only if my unit were leased? How is it determined which units get leased and which do not? What has been the actual history of similar situations?
What management fees are applicable, and under what conditions might they change?
Regarding the realty taxes, I would assume, for the time being, that the commercial rate would apply, rather than residential, until such time as this question is finally resolved, including any possible court challenges / appeals.
Based on as much info as I could accumulate, I would try to put together a realistic "pro forma" income and expense projection. I would then capitalize net operating income at a fairly high capitalization rate (11%? 12%?) to reflect the perceived risk. That might result in a rough indicator of what I would pay.
A "gut feel" tells me that the resulting figure from this exercise might not actually make any sense, which would tend to reinforce my impression that it's a poor investment.
To those who are thinking of purchasing at present, best wishes. If everything actually goes well, these people could make a fat windfall profit in a few years, and would be deserving of it.
