12 Unit Multi-Family Property Valuation

[Ben Matityahu]

Can a 12 Unit Multi-Family property be offered for sale according to residential property rates and not NOI ?

On projected current rates and Expenses based on NOI I got a valuation that is 50 - 55 % lower than the asking price which is based on comparable residential units in the area I was looking at ... in simple terms the price is more or less justified if you sold each unit individually but if you evaluate it as a multifamily property its 50-55% less than the current suggested price .... number example 4 mil asking price valuation (Residential calculation) vs 2 mil valuation (Based on NOI Multi-Family calculation)

The property in question is a "text book" built and zoned as multi-family property no doubt... 

Which Valuation is correct for the property ? it is located in the Miami Area.... Thank you   

[Melanie P.]

Small multifamily trades closer to comps than a strict NOI/Cap Rate calculation. That is why you must take with a grain of salt investors here who claim that they "forced appreciation" and their property is now worth "double." That's great on paper and makes you happy with yourself, but when it comes time to sell small multifamily you're not going to force a double in sales price by doubling the NOI.