Calculating ARV without comps on a Multi Family

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Calculating ARV without comps on a Multi Family

Mike ToussaintPro Member
NC · Member since 2023 · 11 posts · 4 votes

Hello everyone,

I'm new to RE investing and was interested in a four unit property. The issue i'm having is there aren't any recently sold four unit properties nearby to run comps with. Are there any other ways I can run comps on the subject property? Your help/time is greatly appreciated. Thank you!

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  • Abel CurielBusiness Member
    Real Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
    9mo
    Quote from @Mike Toussaint:

    Hello everyone,

    I'm new to RE investing and was interested in a four unit property. The issue i'm having is there aren't any recently sold four unit properties nearby to run comps with. Are there any other ways I can run comps on the subject property? Your help/time is greatly appreciated. Thank you!


     Hello Mike, 

    I would try expanding outward to other nearby areas with recent 4-family comps. 

    If you still can't find any, try looking at local comps as far back as 18-24 months ago.

    I'd also recommend using a price per sq. ft. comparison of recently sold 3-family properties in the area.

    Local investor friendly Agents and lenders with appraisal contacts can help with this.

    Lastly, consider looking at average and median cap rates for local 2-3 family properties and apply that cap rate to the subject property.

    All the best!

    Abel

    REbuild Team - eXp Realty5234 Reviews
    WebsiteView Page
    0Reply
  • Andy SabischPro Member
    Investor · Jackson, MS · Member since 2021 · 657 posts · 559 votes
    9mo

    ARVs on a multi family are not as key as they are on a SFH. The question you need to answer is what will the rents be as that is what investors need to calculate their ROI on a hold property.

    If the rents do not support a purchase along with the ongoing expenses (use the rental tool here), you will have a hard time selling to an investor.

    0Reply
  • Frank PyleBusiness Member
    Specialist · USA · Member since 2024 · 279 posts · 130 votes
    9mo

    On small multifamily I rarely get clean comps either, so I back into value a few different ways and see if they all land in the same neighborhood. I’ll look at sold duplexes and triplexes and normalize to a price per unit and price per square foot, then sanity check it with an income approach using realistic market rents and a cap rate that fits the submarket, not a national average. If there are any 5 to 12 unit sales nearby, those can actually be more useful than forcing a bad fourplex comp, and I’ll also check what similar units are leasing for right now to make sure the rent story is real.

    This is where having someone pull the metrics fast helps a lot so you don’t burn weeks chasing a deal that never penciled. A good service can run CMAs, fair market values, fair market rents, and help you pressure test assumptions like vacancy, concessions, bad debt, and turn costs, then tie it all back to an acquisition plan and an exit price you can defend. I work with a lot of investors who use Investors Edge Concierge for that kind of full picture review from purchase to disposition, especially when the data is thin and you need multiple valuation angles.

    What market are you in and what are you assuming for market rent per unit and stabilized expenses so far? Do you have the unit mix and current rents or is it vacant right now?

    [email protected]317-501-3467
    Frank Pyle at ExP Realty
    WebsiteView Page
    NEXA Lending- Investors Edge Concierge
    View Page
    0Reply
    • Mike ToussaintPro Member
      OP
      NC · Member since 2023 · 11 posts · 4 votes
      9mo
      Quote from @Frank Pyle:

      On small multifamily I rarely get clean comps either, so I back into value a few different ways and see if they all land in the same neighborhood. I’ll look at sold duplexes and triplexes and normalize to a price per unit and price per square foot, then sanity check it with an income approach using realistic market rents and a cap rate that fits the submarket, not a national average. If there are any 5 to 12 unit sales nearby, those can actually be more useful than forcing a bad fourplex comp, and I’ll also check what similar units are leasing for right now to make sure the rent story is real.

      This is where having someone pull the metrics fast helps a lot so you don’t burn weeks chasing a deal that never penciled. A good service can run CMAs, fair market values, fair market rents, and help you pressure test assumptions like vacancy, concessions, bad debt, and turn costs, then tie it all back to an acquisition plan and an exit price you can defend. I work with a lot of investors who use Investors Edge Concierge for that kind of full picture review from purchase to disposition, especially when the data is thin and you need multiple valuation angles.

      What market are you in and what are you assuming for market rent per unit and stabilized expenses so far? Do you have the unit mix and current rents or is it vacant right now?


      That makes sense. Any suggestions on tools to quickly analyze deals? I'm in the NC market currently. Not sure about current/market rents as I'm new to investing. Thanks

      0Reply
  • Frank PyleBusiness Member
    Specialist · USA · Member since 2024 · 279 posts · 130 votes
    9mo

    Best way to dive in is to grab an address you are interested in and send it over. We can run a quick Investor Edge Concierge analysis with rent comps, sales comps, and a clean underwriting snapshot, then hop on a Zoom to walk through it and answer questions.

    What part of NC are you focusing on and do you have a first address in mind?

    [email protected]317-501-3467
    Frank Pyle at ExP Realty
    WebsiteView Page
    NEXA Lending- Investors Edge Concierge
    View Page
    0Reply
  • Bo SmithPro Member
    Hinton, WV · Member since 2026 · 1k+ posts · 373 votes
    7mo

    For multifamily without direct comps, I use the income approach - take the annual rent roll, divide by the cap rate for your area. Also check single family comps and multiply by number of units as a sanity check. The income method is usually more accurate for small multifamily anyway since investors care more about cash flow than appreciation. What's the monthly rent looking like on each unit?

    0Reply
  • Warren Ifergane
    Lender · Miami, FL · Member since 2024 · 37 posts · 15 votes
    6mo
    Quote from @Mike Toussaint:

    Hello everyone,

    I'm new to RE investing and was interested in a four unit property. The issue i'm having is there aren't any recently sold four unit properties nearby to run comps with. Are there any other ways I can run comps on the subject property? Your help/time is greatly appreciated. Thank you!


    When there aren’t many direct comps on a fourplex, most investors switch to income-based valuation.

    You can look at:

    Price per door from recent 2–6 unit sales nearby

    NOI ÷ market cap rate to estimate value

    Price per square foot from other small multifamily

    You can also expand the radius or go back 6–12 months if recent comps are thin. With small multifamily, buyers usually care more about income potential than exact comps.


    0Reply
  • Ryan D.
    Investor · Portland, OR · Member since 2026 · 67 posts · 35 votes
    6mo

    I agree with Warren. I use net operating income based valuation to figure out the ARV. Our local market is ranging between 5-6%. After estimate, you can sort of compare it against local SFH to see if it makes sense or not.

    0Reply
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