Cap rate on multifamily

7 Replies

I am trying to get comps for ARV on 3 duplexes. 2 of the duplexes are next door to each other and the 3rd duplex is behind on of the others. My realtor can't seem to find comps for the property. She did bring up going the NOI route. How would I get the cap rate on this property in order to calculate comps?

@Christian Thompson they will still be valued separately based on comps as residential property. I would make friends with an appraiser; they will have access to all of the data your agent won't. Someone at CBRE, JLL, etc.

@Christian Thompson . She needs to get creative. Are there any 1/2 duplex sales? Does she need to cast the net wider or further ? My understanding is appraisers for 1-4 use the same data from the MLS that agents have access to.

Do you think they are fairly priced ? If not be careful signing the appraisal addendum.

Also ask your agent to ask the listing agent how they came up with the asking price ? Tell her to work with them as partners in getting this deal done.

I know it’s a silly question but does she specialize in working with investors ? It’s a different mindset and not all realtors understand the numbers side of buying Real Estate. By all means she can call me and we can run through this together if you like.

@David Lilley is spot on, no CAP for under 5. You realtor just isn't working that hard. There are always comps, there probably just aren't obvious ones. You are looking for 1/2 mile and 3 months out sold, like-kind first. When you can't find that you just keep expanding your miles and your time until you have some options. There have to be other 2-family sales in the past six months to pull from even if not exact.

@Lucia Rushton and @Jonathan Greene Thank yall. This is an off-market deal, so we are trying to find the comps to make a fair offer. She was able to find comps from purchases a year ago. As of right now the deal isn't looking too good. I talked with the seller and he's thinking 1.3 - 1.4 million. With the current rents and the high property tax it would cash flow -3k at the purchase price of 1 mill.