Selling a Multifamily w/SF. Suggestions?

Question

Earlier this year my wife and I bought a 7 unit apartment building that came along with a SF 2/1 on the same lot. I've nearly completed the interior restoration and all units are rented out (wife and I live in the 2/1 SF). Monthly gross is about $4800 (if wife and I paid for our 2/1 place - $4100 otherwise). Basic utilities are included with an average of $500 per month on all units including the house. There is also a small onsite laundry with inherited leased machines (50/50 spilt after $40 mo).

Here's the question: with no real or recent comps what's my best way to estimate asking price. We are in northern New Mexico not Denver so price will be less to be sure but I'm looking for a starting point. Thanks.

Tom Shallcross · Answer

Hi @Jeffrey Campbell - As it's over 4 units, most investors will not evaluate the purchase price on comps, but instead on cap rate and NOI.  I would contact with a broker to get an idea of the local cap rate for your (insert A, B, or C) property.   Once you have a rough idea of the cap rate (and you can assume conservatively if it's a range) you know your NOI and can figure out the purchase price.

Here's a good BP article that outlines the approach and there are a bunch of other good ones on the site as well: https://www.biggerpockets.com/blogs/2728/51036-cap...

Let me know if this helps and/or if you have any other questions.

Nick Paul · Answer

Hi @Jeffrey Campbell, shoot me a message with more specifics. It may be something of interest to myself or other friends/investors that I partner with on deals. Curious to know year built, renovations done, location in Raton area, expenses etc. Look forward to connecting with you.