Small Multi-Family (4 units)

[Edward Jackson]

Happy Monday everyone! I have a small multi family property under contract (4units). I'm a new investor and I'm having troubles on how to calculate the ARV for this bad boy. Any advice? Thanks in advance!

[Andrew Postell]

@Edward Jackson it would be pretty challenging to go through this in a forum post.  This is usually something like a 1 hour class that most people take and then they have to continually sharpen the skill throughout their career as well.  If you know how to see sold properties in your state that would be a good place to start.  Zillow might be of some help but there are other services too.  However, some states (like mine) this information is private so we cannot do this at all.  Depending on your loan type you would need to examine either sold comparable properties (called comps) or rental schedules.  Then you would need to view properties that are similar to yours in year build, sq footage, finishes, etc.  There's more to it but I'm just summarizing for time.

Or you can just wait for your lender to run an appraisal on the property.  Sometimes a purchase contract will give you an out if the appraisal comes in low.  You would need to lean on your realtor to make this a part of your contract (that is, unless you know how to do that).  

I hope this helps in some way but feel free to ask anything else if you like.