Help quick! How do I find ARV on a 4-plex with no comps?!

[Trey Oliver]

Hey fellow BP users, 

I need help. I have a potential deal on a 4 plex with a very motivated seller. The problem is there are no other 4 unit apts nearby, so no comps. How should I go about figuring out the value of these apts?

[Andrew Syrios]

Unfortunately, that can make it very tough. Comps with multi-family is always tougher. Are there nearby duplexes that have sold? Are there fourplexes a little further away? Even the average prices of houses in the neighborhood can be helpful. More importantly, have you been able to work out what the cap rate will be on this fourplex? That should give you an idea of where you want to be. The quality of the neighborhood should give you an idea about what the cap rate should be, although I would aim for over 10 either way. And remember, multi-family is about cashflow. Do you plan to hold this property? If so, the key is that the property will cash flow really well.

You can also use the lack of comparables as a negotiating tactic, saying you have to be extra cautious because of that. Unfortunately in real estate, there is no perfect way to value a property, and often, there isn't even a very good way.