Multi-family valuation question

[Ty Martell]

When trying to determine the value of a multi-family property does that value come from the income the property producers regardless of how big or small the multi-family property is? for example, is the value of a 2-4 unit multi-family property based on how much income it producers or is it based on comps in the area? Also confirming that a 5+ unit rental value is based on Income it produces.

[Kim Meredith Hampton]

@Ty MartellOn the residential appraisals for a 2-4 unit, they usually will do both sales comps on comparable properties, then they also run an income approach as well to come up with a valuation. 

In the commercial side of 5+, they actually do both as well, but they really take a deep dive in the income produced from the asset, as if they ever needed to foreclose, they want to know the asset would take care of itself. Also, the sales comps can come from all over the county of like kind, it doesn’t necessarily have to be right down the street