Increasing Noi in a four flex property

[Remone R.]

i was watching a video on youtube about purchasing multifamily properties and posed a question. The instructor mentioned that increasing the NOI i.e. rents in a four unit or less property doesn't increase the value, BUT it does in commercial property 5 units or more. Is this true?

[Account Closed]

Basically a 4 unit is valued using the same method as a single family home. It is appraised by looking at comps and square footage. A 5 unit and up is valued using the NOI. There was a recent BP podcast that talks a lot about this. Podcast # 238 with Michael Swan. Check it out