All Forum Posts by: Penny Wilkinson
Penny Wilkinson has started 1 posts and replied 7 times.
Post: Looking to sell a duplex but having trouble determining value
- Posts 7
- Votes 3
Yes, we did sell the property and all went well. Feel free to reach out.
Post: Looking to sell a duplex but having trouble determining value
- Posts 7
- Votes 3
Quote from @Jay Hurst:
Quote from @Penny Wilkinson:
How are appraisers approaching value on multi-family when there are extremely limited comps available?
I am considering selling a two-unit in West Texas, but only one duplex has been sold in town in the past eight years. I've talked to two local agents about possible price points to list at, but it almost seems like they are pulling numbers out of a hat. I'm curious what others have run into when comps are very limited. Rents are high in this town and I think folks just don't sell their multi-family units very often.
That is crazy that there are not more 2-4 family in a market like Midland-Odessa with a ton of transient oil field workers that do not always put down roots. Do both cities zoning make it very hard to build 2-4 unit properties?
Post: Looking to sell a duplex but having trouble determining value
- Posts 7
- Votes 3
Quote from @D'Ondre Hart-Robinson:
Quote from @Penny Wilkinson:
How are appraisers approaching value on multi-family when there are extremely limited comps available?
I am considering selling a two-unit in West Texas, but only one duplex has been sold in town in the past eight years. I've talked to two local agents about possible price points to list at, but it almost seems like they are pulling numbers out of a hat. I'm curious what others have run into when comps are very limited. Rents are high in this town and I think folks just don't sell their multi-family units very often.
Hi Penny i'm actually an investor that resides in Odessa as well and my realtor actually just sold a duplex recently and in that area they have several occupied duplexes and some for sale. So if you want to get some more insight or an opinion I can send you over her contact information.
Sure, that would be great. Thank you, D'Ondre.
Post: Looking to sell a duplex but having trouble determining value
- Posts 7
- Votes 3
Quote from @Gino Barbaro:
If there are no comps, then I would try to ask community banks what they would be able to lend on it. You could try to value it with the income approach, with NOI & DSCR, but that usually isn't done with smaller multifamily.
You're going to have to extrapolate out farther and see where other smaller multifamilies have traded. Rents may be high, but where are taxes and insurance. And how much deferred maintenance does the property have?
A lot of times it is pulling value from thin air. It comes down to supply and demand. Prices have been crazy because there was so much demand. Now that demand is cooling, values are dropping. You may have an advantage since there is very low deal volume in your area, and may have multiple bidders.
Good luck
Gino
Thank you, Gino. That is good information. The agents seem to think multifamily parcels get snatched up quickly because the inventory in this category is low, but this property also has some deferred maintenance we are trying to decide if we should address before selling or attempt as-is and reflect that in the price.
Taxes and insurance are high in West Texas but I have run the numbers at a few different price points and thankfully, it will still cash flow for an investor with 25% down.
Post: Looking to sell a duplex but having trouble determining value
- Posts 7
- Votes 3
Quote from @Robert Rixer:
Appraisals aren't an exact science. Appraiser will use data from whatever closely matches the subject. I've had appraisers use adjacent town comps. It's likely they may even use data of SFH with similar lot and building square footage.
That's good to know. Thank you, Robert.
Post: Looking to sell a duplex but having trouble determining value
- Posts 7
- Votes 3
Quote from @Nathan Gesner:
Quote from @Penny Wilkinson:
I'm in a community of 10,000 and deal with this quite often. I priced an off-grid home when there were none sold in over six years. I am currently selling a 16-unit apartment complex, the first one to sell since 1998 when this buyer bought this one!
- Sales comparison A common method that compares the property to similar properties nearby and their relative prices. This method is simple but not precise.
- Cost approach A straightforward method that adds the cost of the land to the cost of building construction.
- Income approach Also known as the rental income approach, this method estimates the market value by analyzing the property's anticipated future income and converting it to a present value estimate.
- Gross rent multiplier (GRM) A method that divides the purchase price by the gross annual rents when the property is 100% occupied. This method provides an indication of value based on the property's rents.
I try to evaluate a unique property 2-3 different ways, then make a highly educated guess based on my knowledge of the market.
Thank you, Nathan. That is a great suggestion. I appreciate the outline.
Post: Looking to sell a duplex but having trouble determining value
- Posts 7
- Votes 3
How are appraisers approaching value on multi-family when there are extremely limited comps available?
I am considering selling a two-unit in West Texas, but only one duplex has been sold in town in the past eight years. I've talked to two local agents about possible price points to list at, but it almost seems like they are pulling numbers out of a hat. I'm curious what others have run into when comps are very limited. Rents are high in this town and I think folks just don't sell their multi-family units very often.