Quick question BP! I'm on the search for a small multifamily unit in Montgomery County, PA.
I would like to understand how an appraise goes about estimating the value of a duplex, triplex, or quad. I've read that these property types can be appraised just like any SFR based on comparable sales. However, I've also read that they can be value by the income they produce through the gross rent multiplier (GRM) method. Can someone please shed more light on this for me? If you know any specifics about this subject for Montgomery County, PA - please share as well.
Thanks in advance BP!
Duplex, Triplex and Quad are valued the same as single family.
The value of anything up to 4 units is strictly based on comps.
Anything 5+ units switches over to an income based valuation.
@Oscar Beteta I would tend to agree but there are quite a few commercial banks that will also consider recent sales and the income for evaluating the appraised value. It will largely depend on how strong your finances are, how good your relationship with the bank is and how strong the property looks financially
Very good. Thanks guys! It's tough valuate a duplex, triplex, quad as there not many similar properties that have sold nearby. So it looks like I have to out to about a 8 mile radius to find a handful of similar comparable sales.