Miami Triplex - Appraisers and lenders advice

[Jean-Baptiste Ramet]

Hello Bigger pocket community,

I am looking at a property from a wholesaler who described it as a triplex. Two 2/1 and one 1/1.

I went to the property and it is one main house separated in two with one 2/1 on one side and one 2/1 on the other side with an extra storage room in the back. There is also a smaller separated cottage house (1/1) in the back of the property.

The public records classify the third room of the main house as storage and the back cottage as enclosure with plumbing. So at least they know the structure exist but do not count as bedrooms.

My idea is to buy the property cash and renovate to then cash out but I would need the expertise of appraisers and lenders to make sure I don't get stuck and can effectively cash out.

Question for Appraisers: How do you appraise these features? What would you call comparable? I am trying to get the most accurate ARV.

Question for Lenders: As the back room/storage and cottage are not considered in the public record as bedrooms, would you be able to include it in the underwriting? Also, as a separate question, is there a "seasonality in Miami" where the units have to be rented for a certain amount of time before a cash out? and last, how has covid impacted the ability of banks to proceed with these cash outs?

In terms of numbers to give an idea, the wholeseller is asking $315K, I estimate the rehab cost to be $45K therefore $360K total.

I believe that the first 2/1 can be rented for $1,250 and the "3/1" for $1,400. The separated cottage would be $1,200. So potential income would be $3,850/Month

Thank you all for your help!

[Jean H.]

@Jean-Baptiste Ramet As Maggie said, I would first look at zoning. Is it zoned SFR or duplex or multifamily? If it's zoned SFR (which is what it sounds like), an appraiser and a lender will only use SFRs as comparables which would not help you in the refi phase of the BRRRR. They would discount any renovations on anything above and beyond what is on the property record.

If it is legally an SFR but is in a duplex zoning, you could apply to rezone it a duplex. That would really help with your appraisal and refi—a lot of value add.