The convention is in lending that multi-family properties are those with more than 5 units and as such are considered commercial properties.  Properties with less than 6 units are classified as residential properties and loaned on just like you would a single family home.  The difference being on how they are valued.

DUPLEX & 4-PLEX = COMPARABLES APPROACH
MUTLI-FAMILY PROPERTIES = NOI & CAP RATE VALUATIONS

Doesn’t make much sense does it when they generally bought as income producing properties does it?  The one caveat to this is that because two and four unit properties are counted as residential homes, you can purchase them with FHA loans and live in one of the units.  As I have discussed before, buying a duplex or 4-plex as a first home is a great way to get started in real estate investing.

There are some other tricks that can be applied to rental properties because of the differences in how they are valued as well.  If you are in the Seattle area and thinking of investing in a rental property or twenty call me and we can discuss some of your options!

Everett Multi-Family Property Statistics

The sold figures for 3-5 unit multi-family properties in Everett were skewed slightly by the fact that there have only been 2 sold in the past 90 days, one of which was a tri-plex that closed at $199,900.  I suspect that it needed some work.  Listings that say ‘Needs TLC’ and ‘Buyer to waive form 17′ are usually in pretty rough shape or there are serious worries. 

Lynnwood Multi-Family Property Statistics

Prices in Lynnwood for duplex and multi-family properties is higher as you can see, with the age and condition of several of the Everett properties pulling the prices down.  One other thing to note is that there are 42 active duplex properties in Everett, and only 8 currently on the market in Lynnwood.

What I am seeing is that for investors with backing, there are some good deals to be made.  The one duplex sale that did happen in the last 90 days was only on the market 19 days and dropped from an initial price of $425,000 to a final selling price of $370,000.  At that price it most likely won’t break even if it is financed, unless of course there was a sizeable down payment.

If you are shopping in this area for a duplex or small multi-family property, my suggestion is to have your financing ready, and make some offers!  The market isn’t moving very fast, which means sellers need to compete if they want to sell.

When you are ready to get out there and start making some offers, give me a call at 425-773-3149 or send me an email at Jacquie@JacquieCliff.com and I will try not to have too good of a time beating up the sellers (proverbially) for you.  Of course if you are looking in areas other than Lynnwood and Everett for multi-family investments, I can take care of you there as well.  If you need and example, just check out my road trip to Aberdeen to look at a bunch of multi-family properties (which had positive cash flow!)