I looked at around 10 properties on Zillow and the spreads are quite large. Is this normal? Should you bid lower on multi family properties compared to other style homes like SFHs or condos?
Investor · Topeka, KS · Member since 2015 · 1k+ posts · 1k+ votes
6y
Sellers are trying to maximize their profit by selling into the hot market. Buyers want a good deal so they are looking to buy for a low cost as they can. The market, hot or not, should not impact what you offer for a property. You should define what a good deal looks like and offer based on that. In a hot market you will get fewer deals and when the market sinks you will be able to purchase more.
Real Estate Agent · Media, PA · Member since 2017 · 361 posts · 250 votes
6y
What do you mean by spreads? The multifamily space is very competitive with househacking strategy folks who can "afford" to bid more than a non-occupying investor due to better financing (rates, lower down payment etc) and also by self managing. This has driven prices and competition up. You should bid what your analysis suggests is a great price for the property, keeping in mind that many of the multifamily properties in the Greater Philly area are converted older homes rather than purpose built multis, so often the utilities are co-mingled among units (water, heat, electric, gas etc), meaning you either would want to convert/separate them so tenants can pay their own, or ratio bill (which adds mores item to track and manage)