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Updated over 6 years ago on . Most recent reply

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23
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Matt Dubois
  • Greensboro, NC
2
Votes |
23
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Estimating 4-Unit ARV

Matt Dubois
  • Greensboro, NC
Posted

How do I estimate a 4-unit property ARV? The property I'm looking at is currently a former funeral home with enough room to split it into 4 2br/2ba units. Rents estimated at $1500 each on the low end, and possibly as high as $2000 each.

I have the following comps, but my agent had to go back 1000 days to get them:

CLOSE PRICEUNITSBEDSAVG. BUILDING RENTSANNUAL GROSS INCOMEPROJECTED EXPENSESCAP RATE
500,00044X 1 BED$1,125/MONTH54,00020,0006.80%
252,00033X 1 BED$758/ MONTH27,30010,0006.87%
490,00043X 1 BED | 1X 3 BED$1230/MONTH59,04027,0006.54%
488,25031X 1BED |2X 2 BED$1500/MONTH54,00015,0007.99%

The lowest rent property is in a less desirable part of the area and is older and run down.  The other units are more updated to about where we're targeting - above builders grade but not top-of-the-line, either, if that makes sense. 

My agent feels it'll appraise at $550,000 - $600,000.  I'm a little skeptical.  

  • Matt Dubois
  • Most Popular Reply

    User Stats

    412
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    254
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    Heath Ryans
    • Investor
    • Kingsport, TN
    254
    Votes |
    412
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    Heath Ryans
    • Investor
    • Kingsport, TN
    Replied

    @Matt Dubois 4 units and below are appraised the same way a single family home would be. You have to look at the comps in the area. NOI, cap rate, ect doesn't matter. If you can find any that match it within a reasonable time frame (like 6-12 months max) then you would probably need to come up with an average price per square foot for the neighborhood.

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