How to find ARV on a multifamily house

[Tomi Stoya]

Hello BP,

I am interested in a REO Triplex, that recently showed up on MLS in my area. The property is in a pretty rough shape. The kitchen has only bare walls (no appliances, cabinets, countertops), certain sections of the roof have been patched with felt paper instead of shingles (most likely the whole needs to be replaced), basement has limestone walls and is moist (I believe that water is leaking into it). Before deciding how much to offer (or whether to make an offer at all), I need ARV (after repair value), as well as estimated cost of rehab. While I have a generally good idea how to estimate the rehab, I am a little bit confused on how to determine ARV. What most books say is to find comparable properties that have been sold in the last six months in the area (0.5 miles radius). In this case however, should I compare this property only to other triplexes? While I did find data on other triplexes sold in the same town, all the history that I have for the immediate vicinity of the house in question (0.5 miles radius) is for single family houses only? I live in a small town (<70K population).

I am new to real estate and I appreciate any tips on how to approach this.