Hello my fellow awesome bigger pocket members!
I need help. I'm a licensed real estate broker/investor serving central Indiana, and I've primarily only dealt with single family. I have an investor client of mine interested in a 4 unit here in Indianapolis and I've never comped a mulit-unit out before. I need help...
...What data do I pull/look at to properly price out this property? Any advice would be MUCH APPRECIATED.
Thanks in advance for any insight! :D
@Mickey Russo Here's a few of my thoughts on multi's in Indy..
In Indianapolis: When dealing with multifams, you need to be aware of a couple of different things.
Higher vacancy rates, instead of 2-4 weeks to fill a single fam, you are looking at 4-8 weeks to fill a multifam. It’s not for lack of applicants, but lack of GOOD applicants.
Higher turnover rates.. While my single fam renters generally rent for 4+ years on average, my multifams only rent for 1-2 years on average. The premium for single family houses is not that much more, and most residents will gladly pay that amount to not have neighbors.
Watch out for owner paid utilities. These can break the deal. While water/sewer is easy to deal with, anytime you are paying for heat you are looking for trouble. Residents crank the heat up in the winter and then open a window to cool off...
I am not trying to scare you off, just you need to budget for them.
In multifams: If tenants are paying all utils I generally say that 1 bedrooms rent for $450-500 and 2 bedrooms rent for $500-550 and 3 bedrooms are $575-650... This is for your typical multifam in Indy in the low income areas.
Does that help you figure out your numbers for a cashflow analysis?
@Mickey Russo , in Mibor, under the search drop down, skip over the residential you usually select and go down to multi-family quick. Under the location section, type in the address of the property and do .25 mi radius. You should find other multi-families in the area that you can comp with, but it probably won't be many. Most multi-fams aren't on Mibor, they're usually on loopnet for better or worse.
@Mickey Russo - I agree that large multifamily units are put on LoopNet but small multifamily is usually sold in Mibor. You can search solds for 4 units specifically. That option is at the bottom of the criteria page. However, not all Realtors put the listing in correctly so you may miss a 4 unit if you limit your search to that number of units specifically. I would start by searching between 2-8 units and weed out the building that aren't "like properties". That should help.
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