Should the purchase price of a MF have any units on a month to month lease figured in with the price or deducted?
Hi @Boukari Harris , sorry, but I not sure what you mean? If you are analyzing or deciding to buy a multi-family property, I am not sure how having tenants in the property should be taken into consideration of the price to be paid for the property at all. Unless it is a property that has over 5 units (commercial), in which vacancy rates and the rent roll would be important to the valuation of the property, anything that is a 4-plex or lower, I would suggest that the value of the property should be based on prevailing comparable value (local comps), not on the tenants in the property.
Can you elaborate on your question, maybe I can help answer?
yes Sir. I am looking at this 4-unit building. It is fully occupied but one of the units is on a month to month lease. I analyzed the property as is and used a vacancy rate with my calculations but I wondered if the month to month should be credited to derive my offer. What your saying makes things clear. I will check on the comps in the area. Thanks a lot for your input