Estimating Appraised Value on 4 Unit? - Posted by Jeff

Posted by Bert NH on July 31, 2003 at 22:23:11:

Who knows? What the building grosses is not real helpful here. What is more useful is what it nets. Its Net Operating Income (NOI) is the money left after you subtract out all expenses except mortgage payments.
EXAMPLE: If Building A grosses $16k, has expenses of $5k then its NOI is $11k. If building B grosses the same $16k but has expenses of $7k (because its very hard to heat in the winter) its NOI is only $9k. This better represents the investment quality of the 2 buildings. As such I would expect Building A to be worth more than Building B.

What you really need to look at is what other buildings with similar NOIs to your building have sold for within the past few months in YOUR AREA of the country. With the info given your question cannot be answered. Talk w/ a good RE broker who deals in apartment houses in your area.

Estimating Appraised Value on 4 Unit? - Posted by Jeff

Posted by Jeff on July 31, 2003 at 11:30:12:

I am looking at a 4 unit that will generate 16,000 a year in rent, Based on that can assume the property will appraise for $70,000 -$80,000 on an income approach?


Re: Estimating Appraised Value on 4 Unit? - Posted by GL - ON

Posted by GL - ON on August 01, 2003 at 16:41:19:

I don’t know what it will appraise at but it should have positive cash flow at any price up to $100,000 or slightly higher.

This means that at $70,000 to $80,000 you should be safe financially. It does not mean it is worth that much.

I suggest you look up some similar properties that have sold in the last year and compare them. A friendly real estate agent will do this for you.

According to your figures the rent will be about $333 per month per apartment. This seems low. What kind of place is it and where is it located?