How To Find Apartment Complex Value?
I am looking at an apartment complex and I need to know the best way (most accurate) to find it's value for a flip.
I also need to know if I am correct in assuming that a local court house records search will provide the same info needed for an apartment complex as it would on a single family property.
The guidelines for apartment complexes are much different than houses. You will see on an appraisal the comps are in a completely different neiborhood. the best way to find out the value is to have a comp search done by your local appraiser's office. That is what they do for a living so it would the most accuate information you could get. Also if your County's records is anything like ours that would be the last place i would look. LORI
There are a couple of different ways that you may want to try.
Keep in mind that income properties are valued based on the income that they produce. The best way to ensure that your property is worth more is to increase the income.
Figure out the normal expense factor for multi's in your area. A commercial realtor or MAI appraiser can help you with this. Try your county commercial assessor as well. You'll probably find two numbers....one of properties that are managed by property management companies, and another for those that are managed by the owners. For my area 40% and 30%, respectivly, are typical. Find out what the going cap rate is for multi's in your area. The basic math is:
(1-expense factor) X income = NOI
NOI / Cap = price
(keep in mind, cap is a percentage, e.g. .9.5% or 095)
as mentioned before, get the address of the property and call your Assessors office. Tell them the condition of the property, unit size, layout, age, and ask them what they would expect it to appraise for. Ask them in terms of price per unit and price per square foot also.
Start looking around at properties. Get sold comps from realtors that are comprable in price, size, age, and location.
Once you get a feel for your area, you'll be able to guess what people will pay for yours once it's finished. Many lenders require one year of seasoning before they'll honor a new appraisal. They'll also ask to see 3 years of financial performance.
Hope this helps.