4 Unit-Residential vs. Commercial

[Tyler Ansell]

I'm trying to purchase a 4 unit property in Tampa, FL. It is listed with a commercial agent, and when I've spoken with them they keep saying commercial, commercial, commercial. The asking price is astronomical and they believe that it will underwrite and appraise for that because of cap rate, income, etc. I agree, a commercial valuation does put it at that price. However, in my understanding cap rate, income production, NOI etc isn't referenced when dealing in 4 units or less. It is a residential property and residential properties are valued based on their comparable sales. A residential appraisal will definitely affect the asking price significantly (~$100k) based on comps I've pulled.

My question is: what hurdles am I likely to face trying to buy a residential property from someone who believes it is commercial and worth nearly 40% more.