Updated over 7 years ago on . Most recent reply
Estimating 4-Unit ARV
How do I estimate a 4-unit property ARV? The property I'm looking at is currently a former funeral home with enough room to split it into 4 2br/2ba units. Rents estimated at $1500 each on the low end, and possibly as high as $2000 each.
I have the following comps, but my agent had to go back 1000 days to get them:
| CLOSE PRICE | UNITS | BEDS | AVG. BUILDING RENTS | ANNUAL GROSS INCOME | PROJECTED EXPENSES | CAP RATE |
| 500,000 | 4 | 4X 1 BED | $1,125/MONTH | 54,000 | 20,000 | 6.80% |
| 252,000 | 3 | 3X 1 BED | $758/ MONTH | 27,300 | 10,000 | 6.87% |
| 490,000 | 4 | 3X 1 BED | 1X 3 BED | $1230/MONTH | 59,040 | 27,000 | 6.54% |
| 488,250 | 3 | 1X 1BED |2X 2 BED | $1500/MONTH | 54,000 | 15,000 | 7.99% |
The lowest rent property is in a less desirable part of the area and is older and run down. The other units are more updated to about where we're targeting - above builders grade but not top-of-the-line, either, if that makes sense.
My agent feels it'll appraise at $550,000 - $600,000. I'm a little skeptical.