How to estimate After-Repair Value without comps?

2 Replies

I'm trying to do an accurate analysis on a potential property, but this is my first and there are literally zero comps.  

This is perhaps the only multifamily home in the entire area. Should I look to multifamily homes miles away in vastly different neighborhoods? Otherwise, how to I calculate the ARV?

Before you try to figure out the appraised  value how does it look from a cash flow value?  What is the muti being rented for now as compared to the cost?  If that works, and the quick analysis shows a cash flowing property  then you can continue.  Is there a real estate person involved in this transaction that can help with the appraised Value?

@Brian Tracy

If you are dealing with a true multi (5+ units) and not a residential property (1 - 4 units) with conjoined walls, then it would normally be valued based upon income / cash-flow and not comparable sales.

In your situation, even if you are dealing with a 3 - 4 unit residential property, I would determine its value based upon the cash flow it throws off and base any potential offer on my analysis.   If you plan on occupying one of the units, evaluate the property both as a pure rental (income from all units) and as a partially owner occupied property with income from the remaining units and any applicable owner-occupant reductions in property tax.   This will give you an idea of the run costs of the property and whether you would be living for free.

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