Shared Bathroom and Kitchen on Mutifamily

[Dustin B.]

Discussing a deal with a seller and having difficulty trying to figure how to really do comps on it.

The property is 7 bed / 3 bath. Within it there is a 3/1, 1/1 on ground level, but then there are three units on second floor that share a bathroom and kitchen space.

Would it be best to try to comp to a three unit on recent sales? Or treat it as a 5 unit with an income approach? Such a huge spread in values between the two. I know a shared bathroom wouldn’t have same value as en-suite. It isn’t far from a college campus so likely would be a target audience so don’t think it’d be difficult to fill.

[David Ramirez]

I would run it based on income 

[Benjamin Aaker]

Have a look at your local ordinances. Some places limit the number of non-blood relatives living in the same building if zoned residential. You are an investor, so you'll need to run the numbers. You should completely ignore the comps, which are certain to be high and put you in the red on your income/expenses. Often sellers price it with comps because it is higher in this market. As an investor, you need to argue otherwise.