Single Family and Small Multifamily Portfolio Valuation

[Kevin Vandenboss]

Looking for some advice and valuating a portfolio of single family and small multifamily (2-4 unit) properties. The portfolio consists of 65 properties making up 104 units. My experience is mainly in multifamily properties as well as commercial investment properties, but I'm not feeling like it makes sense to value this portfolio like I would a single 104 unit property. 

Most of these properties are located in the same geographic area, within a couple miles of each other. Single family home values in this area mostly vary between $50k and $100k.  

When it comes to multifamily properties, most investors in my area try to purchase at around $30k/ door. At $30k/door, with its current NOI, it's about a 14.2% cap rate. Very high for a multifamily property here, but again I can't see valuing this as one.

Does anyone have any experience with this type of deal, or have any insight?

[Andrew Johnson]

Kevin Vandenboss I don’t have a ton of insight, I’ve only been a part of one large portfolio valuation. It wasn’t done based on trying to make it a large commercial multifamily but rather on BPOs but with a hefty discount. The purpose (way back when) was buy it and then parcel it out. Not too many people want to deal with this many low-dollar properties. It’s legwork, massive legwork. Far more than a single apartment complex.

Are you trying to arrive at a value to sell the portfolio or just to inform the owner?