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Updated about 5 years ago on . Most recent reply
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Refinance Small Multifamily Questions
Hey BP!
I am currently trying to refinance one of my properties to hopefully pull out some of the cash I used on the downpayment/ rehab. I have owned the property for 2 years, I have done about $33,500 worth of rehab and raised rents almost 17% since the initial leases. The ROI and cap rate has gone from 6.61% and 6.42 in 2017, to 13.12% and 8.04 respectively.
However I am running the issue now of determining the true value of the property. With it being a small multifamily unit I am having a difficult time finding comps to use as comparison for the appraisal. I have heard multiple guests on BP talking about "fighting back" if the appraisal comes back lower than expected by providing comps. I just want to prepare myself if the appraisal comes in lower than expected.
Does anyone have any tools/websites that can help with finding accurate comps in order to determine the most accurate value of their small multifamily units?
Is 2 years of "seasoning" with increased rents and stable tenants enough time, or should I wait longer?
Most Popular Reply
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Are you referring to your quad in FL? If so, I imagine you should focus less in the increase in rents and more on any sales comps versus your property. If it's 4 units or less the appraiser will be concerned with the comps, not the income / cash flow. Cap rate won't matter.
Hopefully you have a relationship with an agent in the local market who can help you find comps; especially if the agent knows you plan more / future investing in the market and could throw more business their way.
2 years is plenty of time.
DISCLAIMER: I am not an investor so take my inexperienced advice for what it's worth. Hopefully other experienced investors can provide additional guidance.