Multifamily Refinance calculation

[Vincent Johnson]

I'm trying to figure out how to calculate what the appraisal will be after repair is done on a multifamily

[Aaron W.]

@Vincent Johnson How many units is the multifamily? 

If 4 units or less, then it is still considered a residential property and you can look for similar comps.

If 5 or more, then you are looking at a commercial property where the most common method of valuation is the income method. This is done by taking your net operating income (NOI) and dividing it by the local cap rate. For example, if your pre-rehab NOI is $10,000 and the cap rate is 6, then the value of the property is $166,667. If after the rehab, you were able to increase the NOI to $!5,000, then the new value would be $250,000. The increase of the NOI happens by increasing the income or decreasing expenses.

Best of luck!