Upside of a multiplex is limited by the upside of rent?

[Sam Leon]

I am in negotiations to purchase a triplex in an A neighborhood.

It is unique in that everything around it are SFRs.  There is literally no similar property nearby to comp.

I didn't use the SFR properties for comp.

I did an income expense analysis and the cap rate is barely over 6%(on my offer price, not the sellers asking price), hardly a good deal but with the current market and high insurance high property taxes good deals are few and far between especially in the better neighborhoods.

Even though nearby SFR homes have increased their values by a good bit last 2 years, the rent hasn't.

With the rent sort of stagnant, the triplex value is also limited accordingly, right?

I told the owner it has to cash flow and the numbers are the numbers and another investor would calculate this the same way, and 6% is already very marginal. It doesn't matter if the SFR next door increased value by 30%, his triplex rent money didn't go up by 30%.

I also told him he can probably get more out of an owner occupant who will live in one unit and rent out the other two.  Immediately the property tax is lowered with homestead, financing rate is better with OCs, and vacancy rate drops 30%, so they may be more inclined to pay more.

Makes sense? Or should the triplex be evaluated based on nearby SFR comps?