Portfolio Valuation - 6 duplexes

[Kent Lyons]

I've come across a portfolio of duplexes and I'm not sure how I'd go about valuation. There are 6 duplexes (12 doors) on the same block for sale in a package the seller won't split. In terms of financing/valuation, would each of these be appraised and valued individually against comps? Or would they be valued as comercial using a cap rate? 

I'd prefer to get a single commercial or portfolio loan.

They are all fully rented but below market rate. So there's an opportunity to raise the rents, and using the cap rate, substantially increase the value of the portfolio. However if they were valued individually using comps then the deal looks much less attractive (each duplex is already close to the ceiling for comps). This makes a huge difference down the road if I were to do a cash out refi or sell the portfolio myself.

These properties are in the Atlanta Georgia area of that makes a difference. (And if anyone has any lenders they like that could help, please send me a DM).

[Greg Dickerson]

Originally posted by @Kent Lyons:

I've come across a portfolio of duplexes and I'm not sure how I'd go about valuation. There are 6 duplexes (12 doors) on the same block for sale in a package the seller won't split. In terms of financing/valuation, would each of these be appraised and valued individually against comps? Or would they be valued as comercial using a cap rate? 

I'd prefer to get a single commercial or portfolio loan.

They are all fully rented but below market rate. So there's an opportunity to raise the rents, and using the cap rate, substantially increase the value of the portfolio. However if they were valued individually using comps then the deal looks much less attractive (each duplex is already close to the ceiling for comps). This makes a huge difference down the road if I were to do a cash out refi or sell the portfolio myself.

These properties are in the Atlanta Georgia area of that makes a difference. (And if anyone has any lenders they like that could help, please send me a DM).

These types of package deals (portfolios) are evaluated individually using comps for each property for residential not as a CAP rate. Even a portfolio of large multifamily or commercial would be evaluated per individually per asset but would primarily be based on CAP rate depending on the property.