3 unit MF appraisal. 3 buildings on one plot as a single property

[Mark Whittaker]

I am looking at purchasing a 3 unit multifamily deal. it is 3 separate 1100 sqf single family 2/1 houses on one plot of land. sold as a single entity. one of the buildings is damaged and condemned but fixable. My plan is to purchase the triplex and rent out units 1 and 2 while fixing unit 3. After all 3 units are renovated to top condition I would like to do a cash out refi.

my question is... how will the bank determine the value of the property? would it take the rent revenue and multiply it by 10 or would it simply take comps? I suppose understanding this is a key factor in me moving forward on the property. I truly need to understand the ARV but since it is a 3 unit multifamily property I dont understand how to predict that.thanks in advance for any advice

[Nik Moushon]

Before you even go to the bank you need to figure out if this setup is even legal. Three separate SFH on one parcel is usually not what the city likes to see and when it comes to being a legal rental they can come down against it. Especially on the one that is condemned. They might not even let you fix it. You need to do some serious due diligence on the legality of the sale and three houses on one lot. I'm not saying they wont let you...but just because its built doesnt mean its legal. Would hate to see you buy this and be forced to bulldoze two of them.

Also idk if the bank would even consider this a triplex. The definition of a triplex is that they are attached and since they are not I'm not sure how they would look at this.