Finding Deals: An AVM for Multifamily

[Account Closed]

Hello,

I'm wondering if people 1) use Automated Valuation Models (AVM) in the small-medium size mulitfamily space to spot under-valued properties by comparing the AVM price (the predicted appraisal value) to the list price (or the price you think you could reasonably buy the property at) and buying at a large difference (e.g. the Zillow Zestimate or Enodo: https://www.enodoinc.com/e-valuation.html) and 2) use any software to make a data-backed prediction of the ROI of various repairs for a BRRR approach (e.g. Enodo: https://www.enodoinc.com/market.html). Enodo predicts the amount of rent increase you could withstand for a given value-add (e.g. a dishwasher or new countertops) in all zip codes in the US. 

I have not seen any mention of either approach on BP before, but potentially someone can point me to a thread discussing the usage of AVMs for finding deals in the small-medium size MF space. Thanks!

[Brandon Sturgill]

@Account Closed Depends on how the algo's are structured...I use Core Logic and find them to be fairly accurate...truth be told, it's impossible to produce AVM's and be accurate long term...especially in a rapidly changing market. Your market is pretty consistently expensive ;) so you may have better luck. And anything that can give you an upper leg is definitely worth a try. I think you're on the right track...the only problem is it takes a lot of time and effort before you can make an informed decision about whether the strategy is viable...