Which is more valuable? 1700sf SFH or 1700sf Multi?

[Jennifer T.]

Hello BPers,

I'm looking for general opinions at this point.  I came across a property that is pretty odd configuration and I'm trying to get a rough idea of its worth.

It is a small 2bd/1ba SFH. In addition, there are three efficiencies on the same property. So four units all together, but they are all separate buildings. The efficiencies look like mini houses. If I didn't know better and just looked at them from the outside, I would have thought they were fancy, insulated storage sheds. Each of them does have a kitchen and one bath.

And, while I know SFHs and Multis are a bit different animals, I was wondering if the total square footage would be worth more in a SFH or in a Multi? Or is it too much apples and oranges to compare?

I looked at asking prices for two nearby duplexes and one was selling at $57/sf and the other at $77/sf.  I also looked at SFHs and most of them were also selling in the $55-$75/sf range.  The asking price for the property I am looking at is $88/sf, which just seems high for the area...or is it only the cash flow that matters for a multi?  Per the rental analysis tool on this site, it would cash flow at about $700/month after all expenses (including PM, vacay, maint., ins., estimated payments to seller etc.) and the current asking price is $150,000

I guess my thinking is this property should sell for a lesser amount per sq ft, since the potential buyer pool for it would be substantially less than a SFH or even a duplex. While I would be a buy/hold investor, I think it would be a hard sell for whenever I might want to sell it. Only other investors would be interested and I doubt it is eligible for conventional financing because I suspect it is too unusual for a formal appraisal. She is offering seller financing with 10% down. No details yet, other than that.

I'm pretty newbie-ish, and I'm sure made huge mistakes in my jumps of logic.  So, let me have it!

If nothing else, I feel like analyzing and giving a lot of thought to the pros and cons of an unusual property has gotten my juices flowing and my brain working!