Multifamily Unit for Sale - Offer/Financing/Comparables - Help?

[Kyle Allen]

Good morning everyone! I have posted a few topics on here concerning my current project and have enjoyed the great responses. I'm looking at moving up the ladder so to speak on my next deal and need some advice if i'm, going to putt the trigger on this. I have located a multiplex with 8 units in my area. Currently the house is close to our college and has an extremely low level of vacancy due to this. The property was sold in 2002 for 230k, but has now been listed at 470k. The property is a little run down and does not look like it has been updated since the purchase in 2002. My walkthrough today will tell me more. Now, i do not feel the porperty is worth the 470k asking price or anywhere near this. Comes in the city for multi units range from 230k to 800k depending on the area of town they are in. It is a little harder to get comps on these units as i do not have a large pool to choose from for comparing. Does anyone have any advice on this strategy for how to gauge your offer? Single famly homes are much easier to compare and being this is my first large multifamily i want to make sure my ducks are in a row so to speak. The units are currently listed at 550/month which is low for the area. Most places are in the 650-725 area but are more update. I plan on updating the property and raising rent as the units are upgraded. So my main questions are: What is a good way to value a multifamily using very few comps? Since this will classify as a commercial loan what problems will i run into with that and does anyone have any recommendations for banks with commerical loans. Lastly What unforeseen issue have you dealt with in buying multifamily units that i need to be aware of?

I have stuck mostly with single family homes renting and flipping but listening and seeing the success stories on here have really made me want to do this. We have 3 properties rented and are currently finsihing up a fourth to either sell or refinance and rent so i also neeed to see how i can leverage my other properties for collateral on this multifamily if that's possible. I will have to fingure out some creative financing strategies in pulling this off with my properties so if anyone has any advice on these areas or if this isn't feasible and i will need to bring in additional partners or investors please share your advice. Sorry for the long winded post. :-) Thank you everyone and I appreciate all of your expertise and experience!

Kyle Allen