Valuing a portfolio of single and multi family properties

[Jonathan New]

I am entering negotiations of a portfolio of 60 doors across 37 properties. I know how to value commercial properties, and I know how to value residential. For the people that buy portfolios, do you base your offer off of the ARV/rehab of each individual house, or do you base your offer off of the income? Thanks, all!

[Greg Dickerson]

@Jonathan New Location, type and condition of the homes make a huge difference but typically SFH portfolios will trade at a discount compared to what they could sell for individually. Thats why the hedge funds and REITS started being packages of homes so they could hold for appreciation and sell off individually.

The appraisers and the lenders will value each unit individually which should be higher than what you are paying so that's a good thing.

I would not pay a premium CAP rate comparable to multifamily for SFH portfolios as they will not re-trade as such.