Small MF appraisal and comps question

[Evan Salvador]

Hi All, 

I'm going under contract with a triplex in Indianapolis. I tried researching this but it seems to be conflicting information and I'm hoping someone experienced can clear this up for me. I've read that MFs are appraised and valued based on NOI or income approach. But then I found info saying that the income approach is usually used if it's 5+ units and anything under is comped like SF homes. If that's the case, how do you get market comps of triplexes? You have to compare to with other triplexes in the same neighborhood recently sold?

[Chris Seveney]

Evan Salvador
More than 4 units is primarily based on cap rate. A triplex is based on value of property which you want to check comps of other triplex units in the area. Confirm not only value but also are rents comparable to the area and get an understanding of utilities and if they are separated and paid by tenant or landlord - if you are paying utilities that is a large expense / burden

Still make sure the numbers work as a rental.