Comping Multi-Unit Indianapolis Indiana

[Mickey Russo]

Hello my fellow awesome bigger pocket members!

I need help. I'm a licensed real estate broker/investor serving central Indiana, and I've primarily only dealt with single family. I have an investor client of mine interested in a 4 unit here in Indianapolis and I've never comped a mulit-unit out before. I need help...

...What data do I pull/look at to properly price out this property? Any advice would be MUCH APPRECIATED.

Thanks in advance for any insight! :D

[Lee Smith]

@Mickey Russo Here's a few of my thoughts on multi's in Indy..

In Indianapolis: When dealing with multifams, you need to be aware of a couple of different things.

Higher vacancy rates, instead of 2-4 weeks to fill a single fam, you are looking at 4-8 weeks to fill a multifam. It’s not for lack of applicants, but lack of GOOD applicants.

Higher turnover rates.. While my single fam renters generally rent for 4+ years on average, my multifams only rent for 1-2 years on average. The premium for single family houses is not that much more, and most residents will gladly pay that amount to not have neighbors.

Watch out for owner paid utilities. These can break the deal. While water/sewer is easy to deal with, anytime you are paying for heat you are looking for trouble. Residents crank the heat up in the winter and then open a window to cool off...

I am not trying to scare you off, just you need to budget for them.

In multifams: If tenants are paying all utils I generally say that 1 bedrooms rent for $450-500 and 2 bedrooms rent for $500-550 and 3 bedrooms are $575-650... This is for your typical multifam in Indy in the low income areas.

Does that help you figure out your numbers for a cashflow analysis?