Appraised Value

[Zach Melson]

Hi everyone, 

Just a quick question- I am using a commercial analysis for a property that is a fourplex, however my numbers do not come anywhere near what the asking price is or what the seller is willing to settle for. The next door property appraised near the asking of the fourplex, however if this is solely an investment property is there any reason I should not use the formula CAPRATE*NOI to find my offer price?

I know anything less than 5 units is considered to be appraised using COMPS, but this doesn't make sense to me if I am going to use the property in a commercial sense. 

Anyone want to share their thoughts on appraised value, and how I am choosing to find my offer price?

[Account Closed]

There is no reliable source for cap rate comps for small residential properties. Use GRM if you want an income approach double check. Sales comps are much more accurate.