How to Categorize Multi-Family

[Andrew Reyes]

Hi All:

I understand (and please correct me if I am wrong) that 4+ and under 4 unit properties are viewed differently (why?) is there a difference in terms of valuing or targeting different ranges of units per property?

[Michael Le]

@Andrew Reyes It's actually 5+, meaning 5 and up, are considered commercial properties. Properties 1-4 units in size (single family, duplex, triplex, quadplex) are considered residential. 

Commercial properties are valued based on their income whereas residential are based on comparative market analysis. There are also different lending differences as to requirements and terms.