Refinance multiplex (4 units)

[John Yoo]

I purchased 4 unit property in 2022. Purchase price was 250K and rent was $2225. Now all the rents are near the market rent (i.e., $4041). I didn't do any rehab but replace the flat roof.

So here is my question. If I select the same zip code multiplex properties, the sales comps (approximately $290K) are not as great as my expectation. However, if I choose 1-2 miles radius (approximately $365K) , it's much better. I understand that it really depends on an appraiser but is there any chance that I could use 1-2 miles radius approach and present it to the appraiser?

Any thoughts?

[Brian Fung]

Quote from @John Yoo:

I purchased 4 unit property in 2022. Purchase price was 250K and rent was $2225. Now all the rents are near the market rent (i.e., $4041). I didn't do any rehab but replace the flat roof.

So here is my question. If I select the same zip code multiplex properties, the sales comps (approximately $290K) are not as great as my expectation. However, if I choose 1-2 miles radius (approximately $365K) , it's much better. I understand that it really depends on an appraiser but is there any chance that I could use 1-2 miles radius approach and present it to the appraiser?

Any thoughts?

 You're going to want to follow the following general rule of thumb:

- 0.5 mile radius
- same zip code
- Sold in last 3 months
- Same unit count
- Same bed/bath count
- Same square footage

(this is not fully exhaustive but they're the big ticket items)

If the appraiser selects comps that are closer matches to the above than the comps you want to use, you're going to have a tough chance arguing for the usage of your comps over theirs. 

Best of luck. Aloha.