Comps on multi families

[Roselin G.]

Hi all, What are your thoughts on finding comps for duplexes & triplexes? It seems to be quite difficult to find comps--have you run into this issue? Thanks!! Happy investing!

[James C.]

Roselin,

Comps can be difficult to find for a variety of reasons. Your best bet is to develop your network to include local appraisers. This does a few things for you. You can always stop by with coffee and chat about comps, and market trends. You can get referrals from them about potential properties coming on market. You can find out from them who is sending them the most number of appraisals. The person sending appraisal work is a hungry mortgage person who wants to make things happen. It also doesn't hurt that if you specify a friendly appraiser on your deals, they won't surprise you with a bad appraisal (they will probably give you a heads up, or just make it work). The best defense is a good offense.

Other than that, knowing how to do adjustments to properties is critical (again, appraisers are helpful here as well). You can adjust for a variety of factors, but you have to know the amounts to adjust to get it right. Size, amenities, and financing structure are all easy to figure, it's the location and time differences that get to be a bear. In general, best to avoid comps over 1 year old, even with market figures. It's better to take a newer comp in a different town and adjust for location.

Hope that helps.

Good Luck,

Jim