Actually I ran it by a friend of mine that is considered a good appraiser (but this property is out of her area) and she said to the effect "gee that would be hard w/o comps in the area"

Call a few. I had 2 tell me one of my buildings would be hard to appraise because it was a 3 unit. What?!?!

Then the 3rd did it for me.

Maybe the amount of rent could give you a clue. It's all about total rent income less expenses.

When I see multi's for sale in my pay-attention-radius, it's normal to see the price starting at about $15-$30k/unit. On the lower end of the range if it's kind of a sad and crummy little place in need of lots of work; on the higher end of the scale if it's pretty turnkey; and jumping up to $50-$100k/unit if it's shiny/snazzy/urban/solid rents/good finishes/awesome location/new build.

So for an isolated rural town, I'd start thinking more in terms of the $15-$30k/unit sort of range.

I am in the process of selling my first apt. Its a small 4 unit building.. My realtor friend came back with a comp that effectively puts the cash on cash return well over 20% w/ 10% vacancy and all the good stuff..

I told her to set a higher price that will still give investor over 20% return.. That's what I consider selling on "income approach"..

Appraising rural areas is a specialty and very few appraisers know how to do it properly. Lenders will allow a lot of leeway for rural appraisals by allowing them to go as many miles out as needed to find some comparables. It is a lot of work since everything needs to be justified. A normal appraisal for a standard SFH costs roughly $500 today so expect to pay at least triple or more for a specialty.

Bottom line is though that an appraisal is primarily used by lenders to corroborate that the collateral is worth the amount of the loan. They have less value for selling primarily because no two appraisals will be the same and the property is only worth what the market is willing to pay.

If you're not in a hurry, do it as an income approach appraisal, make the listing price based on that and see what happens. Drop the price after awhile, but since this is hard to find comps for, that tells me there's not much of a market for it, or everyone that has a 4plex is holding on to it.

Mike of MA, Call 3 appraisers in the area of the property and ask them about the property. The income approach is most likely the best approach to determine fair market value. I would not call real estate agents they will do a CMA and may overprice the property to get the listing.

Also consider having a pre-inspeciton on the building to know of any repairs that may need done before listing the building.

Mike,

When I sell I pay for an appraisal. On a recent flip the broker was $30k lower than the appraiser plus the buyer paid more than asking.

My $300 appraisal fee brought me an extra $32k.