Consolidating separate 4-plex properties into a single 8-plex?

[Justin Brown]

Looking to buy a commercial MFR with 5 or more units. I found 2 4-plexes in my market that share a parking lot but are owned and listed separately. Can I acquire both with a commercial loan and convert them to an 8-plex? Really wanting to drive up the valuation by increasing NOI and I am under the impression that it is necessary to have at least 5-units to do so.

I appreciate any feedback or input you may have.

[Michael Ablan]

This will depend on your market. What are comparable 4 unit properties worth in your area? What is the cap rate for 5+ units in your area? A commerical broker can help you determine this. Find out what a 8 unit building is worth and see if its more than the sum of two separate 4 unit buildings