Wholesaling a Multi-Family?

Question

In my most recent mailing a multi-family got mixed in with my sfr's and I got a call from a the owner asking how I knew that she "was planning to sell". The owner is retiring and moving out of state soon. Its a 3-unit in a residential sub in Lincoln Park Michigan (Metro Detroit). Each unit is currently rented for $500.

I have never wholesaled a multi-family property before. How do I price it??

Any input would be greatly appreciated, this seller is what I would consider highly motivated!

I have never wholesaled a multi-family property before.  How do I price it??

Any input would be greatly appreciated, this seller is what I would consider highly motivated!

Christian Austin · Answer

Timely post @Bryan Dracka. I've been looking for similar advice. Check out this thread.

wholesaling small multifamily

Looking forward reading any advice given here.

Jeff Greenberg · Answer

You can wholesale a mf as you would a sfh.  Determining price on a small MF may be more difficult if the comps are limited.

Ned Carey · Answer

People buy multi family properties based on their investment value.  Price it based on the net income it produces.

The hard part is figuring what that number is. That is probably in the range of what landlords will pay for SFHs but could be more or less depending on your market.

Look for comparables. Compare price per unit, and price vs monthly rent. If you can find or figure it, compare cap rates.  If you cannot find a nearby small multis to compare to, look farther away but in similar neighborhoods.

Another option is simply have investors go take a look and say what can you offer me for it?  Good luck - Ned