I am looking to buy a multifamily. I'm buying it FHA. It will be a house hack. The numbers look good but I have some concerns that could change things. Its a duplex with a basement. Making it a triplex but its labeled as a duplex. So I'm concerned about the appraisal. There are no triplexes in the area or duplexes with a basement. So will there be comps? Also, it has AC in the window from home depot. Will I have to provide a central area and heat? I'm in GA. Does anyone have experience with something like this happening? Any advice or help?
Hi @Byron Scott ,
The basement would not be considered a unit if it is not an equipped rental like kitchen, bath. It sounded like an empty basement. So, your comps would be other 2 unit properties.
If it was in fact a third unit, then the appraiser will have to widen the search area to nearest counties. I have had this happen, and it brought down the value of the property, but it could go the other way too.
In Oregon, we are only required to have a heat source, so check with GA laws. Usually AC units will do for the cooling source in most areas though.
@Jennifer Z. Thanks for the info. The basement has bath kitchin and everything. Tax accessor recorded it as a triplex but appraiser could say different I guess.
Is it normal for the person selling me the property to pay for the appraisal or should I pay? Because if it doesn't appraise to the value that was accepted then the purchase price could drop and they could not sell it to me for the appraised price. I could lose that money. Just want to know what usually happens.
The tax accessor valued the house at 5k more than what I offered. Is the tax accessor usually close to the appraiser on the value?
Hey @Byron Scott , the appraisal is usually paid by the buyer, and tax assessor values (in Oregon) are about 80% of actual value.
The buyer will pay for the home inspection report and the appraisal. The mortgage company requires an appraisal to cover their investment in you.
If you believe the property is a good investment and you did your due diligence that you are paying less for this triplex than other duplex's - then you shouldn't be too worried about the appraisal coming in lower than your asking price.
No one knows for 100% certainty that the appraisal will come above asking price - the best you can do is your homework/due diligence before you put in your offer.
Agreed @Basit Siddiqi . If your numbers work, then go for it. You are in this for the long term.
I am going through the same thing right now. What they are telling me is that I don't need anything to cool for an FHA loan, but you will need a system that is hardwired/mounted to the home that can heat it. We are working now on possibly getting baseboard heaters or multi-zone mini splits.
Also, for the labeling of the home, check the zoning of the property. It may have been converted without zoning approving it and may be issues later on if you go through with it.
Best of luck,