Establishing Value on Multi-Unit Property.

[Brandon Hughes]

I'm having trouble valuing a multi unit property for sale in my area. It is a homepath property and cashflows better than anything else in the area. I plan on occupying one unit for a year then moving out to purchase another property. Once I move out I want to keep it for passive income. I plan on managing it myself, I already manage one other unit now so I'm familiar with managing tenants.

The property has two units, one is about 1000 sf 2 bed 2 bath with a huge garage. The unit needs somewhere between 30-35k in work. I have an equity line/401k to fund the repairs. Rehab will cost about 200/mo to repay in interest. It will take at least a month to get ready to rent ready. I can probably rent this for 1000$ mo conservatively depending on how nice it is finshed/ layout once completed. (not a good layout now)

The second unit is a newer mfg home 5 bed 2 bath about 1500sf. This one needs minimal work; paint, flooring, ac condensor and minor repairs. This one can be ready in a matter of days and has a great layout. It can command around $1500/ mo rent.

It is a FNMA REO and they are asking 200k. It has been on the market for a couple months, longer than it should in this area.

I think there is a deal here but I don't know how I can put it together. If I have a valuation on the property I can prepare myself to put it together.

There are no multi unit comps over the last year to use as a valuation. This is where I am having trouble.

Any help would be greatly appreciated.

Brandon