Appraisal on +5 units

[Patrick Britton]

Question about the appraised value of larger multi-family properties...

Is the appraised value based on the NOI of the current rent (or appraiser's estimate of rent)? If so, how would an appraiser get all data (expenses in particular) necessary to calculate an accurate NOI?

[Etai Gil]

Hey Patrick,

It mostly depends on the lender that you go with. Remember, you pay for the appraisal but the lender is the one who chooses the company they work with. The appraisal will have all the info on it as far as NOI, but it is up to the lender to decide how seriously they will take that number.

Some lenders require it to big double the mortgage payment at least, others require it to be occupied, while if you have reserves for a couple months, they don't care.

What you mainly want to look for is what lender the borrower is using or if you're getting an appraisal for yourself to just ask upfront.

Hope this helps, feel free to reach out if you have any questions.