Multi Family real value

4 Replies

Good evening to all experts. 

I have a question regarding the value after a Single Family has been converted in a Multi Family. It now is a a 4 unit studio.

The value of this property from the tax county is 29000 $ and the resale price is 60000 $. Is the tax county assesment always accurate or is it the fact that with the yield increase (due to the multiple tenants (4)) and the conversion works owner can resell at a higher price ? 


Sorry my english is not great I am a overseas investor.

Thanks for your reply (if you understand my question)

Adrien:

In the United States properties up to 4 units are valued the same way, Comparative Market Analysis or comps.  Only Apartments are valued on profitability.

While it is almost certain that you improved your yield by converting a single-family into a 4-plex, it is not clear if you have increased the value.  The value of your property will now be compared to other 4-plexes in the area.   If the 4-plexes have an average price that is lower than the nearby single family residences, your value will also be lower.

 As with what I have noticed, the tax assessor's "taxable value" is generally much lower than what the bank will appraise the property at. 

Originally posted by @Adrien Gael :

Good evening to all experts. 

I have a question regarding the value after a Single Family has been converted in a Multi Family. It now is a a 4 unit studio.

The value of this property from the tax county is 29000 $ and the resale price is 60000 $. Is the tax county assesment always accurate or is it the fact that with the yield increase (due to the multiple tenants (4)) and the conversion works owner can resell at a higher price ? 


Sorry my english is not great I am a overseas investor.

Thanks for your reply (if you understand my question)

Adrien, the value at the county level is normally significantly less than the market value of the property. Converting the property from a SFR to a 4-Plex should definitely increase its market value.

All properties with less than 5 units are still considered residential and will be valued according to recent sales of comparables properties in the area. So if the property is now a 4-unit multifamily the CMA (Comparative Market Analysis) should be done based on that.

I would recommend you reach out to an experienced local broker that specializes on that type of assets and ask him/her to help you with the comps.

Good luck!

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