Mike, you should be able to know within a couple grand what the property will appraise for, based on comps and market rents. Our multi units appraisals are always income based, with a glance at replacement cost and recent comparable sales… but the most weight being given to the income.
Ed Garcia posted a few days ago on Caps rates and Gross Revenue Multiplier… that might be helpful if you can seach that post, and check with knowledgeable realtors or appraisers as to the cap rate and grm generally used in your area.
You should be able to have a pretty decent idea of the appraisal once you’ve got that info.
I recently purchased a 2-flat for $28000, seller had it listed for $31000. My partner and I both feel it was a very good deal. We only put $5000 into some cosmetic repairs. We now have one of the units rented and will have the other rented in about 3 weeks. Here’s my question. I am now planning to do a cash-out refi. and know of two other similar 2 flats now on the market in the mid 70’s. We also have a couple of comps. in the same range. I’m planning on asking for 80%LTV on a $74000 value. Will an appraisor and/or lender have a problem with a price tag at $74000, even though we feel we have good evidence to support that value?
I have no idea why the seller listed it so low. We’ve through the building up and down and it’s very structurally sound. All we did was paint, carpet, replace electric box and a few other minor things.