New York, NY · Member since 2016 · 104 posts · 22 votes
I am trying to acquire a 4 unit property and the bank is telling me they won't accept the NOI appraisal method only the comparable method. There aren't a lot of 4 units in my area so the comparable method is not reliable. Are banks not accepting the NOI method or is it just the lender I'm working with?
Hollidaysburg, PA · Member since 2015 · 327 posts · 350 votes
7y
@Brady Boyer, 4 units or less will be considered residential, and that goes for every bank as far as I know (I have never heard of a bank considering it anything else). Residential properties are based off of comparables (comp's/CMA's) via the appraiser. 5 units or more will utilize NOI and other determining factors for loan appraisals. I hope this helps, and good luck!