Appraising a 3 unit with no comps nearby

[Amanda Rose]

Good afternoon bigger pockets. This is our first post! 

My question is this....

We are under contract on a 3 unit. It is in a neighborhood of single family and duplexes. There hasnt been a 3 unit sold in our city for years. I cant find anything to comp to. Will the appraiser really value it based on the single family and duplexes? That seems like it will be way undervalued. All of the lenders in the area say they are shocked at how low of a price we got the contract for. The building is in great shape. New roof,new windows, new carpet. The vacant units are move in ready. Gross rents on the unit will be in the $2500 range. Im just looking for some insight into how the pro's in here would value this property. 

Thanks

Adam and amanda

[Mindy Jensen]

@Amanda Rose , prepare for a low appraisal. What will you do? There are basically 3 choices: Bring more money to the table, have the seller drop their price, walk away from the deal.

If you offered $X, and it comes in at $X-$50k, that is the seller's problem. You won't be able to get a mortgage for it at the contracted price, banks lend on appraised value.

If you still want to buy the property and the seller won't budge, start planning for this now.