Silverton, OR · Member since 2016 · 43 posts · 14 votes
I'm looking at purchasing a 4 plex that needs extensive rehab in Salem, Oregon. Seller is willing to short-term finance while I use my cash to fix up. But how do I determine ARV on a 4plex so I can ensure I can get my cash back out as I can at refinancing (kind of like the BRRRR method)? Thanks!
Professional · Roselle, NJ · Member since 2016 · 25 posts · 4 votes
10y
A 4plex will still typically be priced based upon comparable properties in the area. It is once you get into the 5 units and above that you begin to determine value based upon the cashflow and market capitalization.
Keep in mind that the equity to purchase the property is not necessarily the same amount of equity for a refinance (so if you put 10% down, you might need to wait until you have more than 25% in equity before you can refinance). Also, remember to calculate the fees you will be charged to refinance when you are doing the calculations.
Investor · Coeur d'Alene, ID · Member since 2016 · 551 posts · 218 votes
10y
First you'll want to compare to like properties in your area that have already sold. Then if the appraiser doesn't get enough of a sample they will expand the area a little bit. If you can get a recently sold list form your realtor of the past 4-plexs that will give you the best comparables.