Question about valuing a Triplex.
Hello All,
I am currently looking into the possibility of grabbing a triplex.
In the area where I am looking, the average non-commericial property prices are about 115% - 125% of the tax value. This property is from the 1950's. It is in OK condition. It will need some updating and minor rehab but is technically ready to go. It has three one bedroom units and has tennants in each that have been there for about 3 years each. The listing price for this property is about 245% over tax value. Granted, the property is valued (with land) at about $54,500. The listing price is about $130,000. Obviously, not a high price tag, but I am still confused by that substantial jump. It is in an OK area. Probably a grade B, B- area. Not bad, but not great. Bringing in about $1450/month in rent, total for all units combined and a little under market rent. The current owner pays utilities but I don't think I would want to do that.
Anyways, the base numbers are attractive, but my main question lies in the valuing. I feel like, based on the area, it is very overpriced, and I am sure they are accounting for it being an income-producing property in that price, but isn't that only something you do with commercial (5+ units) properties?
Thanks for any advice!