Real estate pricing guestion

[Bugsinrugs]

I own a triplex in Reno that Zillow estimates each unit being worth $440,000. Yet the entire building is estimated at $770,000. I don’t understand the logic. The reason I’m looking at it’s worth is because I’m getting flooded by investors asking me what I would sell it for.

[porsche4life]

Zillow isn’t a good tool for multi family valuations. Best to talk to a broker that specializes in multi family properties and get a BPO(Brokers Price Opinion) to really know what the place is worth.

[john70t]

The Pros have the good stuff (automatic software) but the real determinant is what the public will pay for it.
That involves full exposure, and your own Realtor doing what they are paid bux to do.

I'd suggest doing your own local search and get a rough ballpark. Make a chart.

[Bugsinrugs]

Can someone explain why each unit is estimated at $44000 but total worth is $770,000. Why not $1.3 million? Just curious.

[porsche4life]

Without knowing the specifics of their algorithms? No we can’t. Zestimate is just a fancy guess based on math of past sale data and a whole number of variables. My guess is it has recent comps for sales around the size of the unit, but no recent comps for the whole building.
Our zestimate was way low for years, then we had two houses the same size as ours sell in a few months down the street, after that the valuation sky rocketed and caught up to the market.

[Bill Douglas]

In theory owning the whole building instead of a bunch of individuals owning units (and arguing), is worth a lot more. because you have control over improvements, who lives there etc. I think $440,000 X 3 PLUS a big premium for being able to own all three.

[CalPersFatCat]

Originally Posted by Bugsinrugs

Can someone explain why each unit is estimated at $44000 but total worth is $770,000. Why not $1.3 million? Just curious.

Because 1-4 units are lumped into SFR valuations. (5+ units are valued based on income produced.)

The $770k number is inconsequential unless it happens to coincidentally correspond to a value justified by the operating income.

Another way to look at is, how many SFR's would $1.3m purchase in that area and what would the rent be for those SFR's? What would the historical capital appreciation be on those SFR's vs. your triplex five years from now?

Is there a management advantage to a triplex vs. $1.3m of SFR's? Probably. But maybe negligible... The SFR's renters will pay their own water bill. I'm guessing that you pay the water bill at the triplex. Same with lawn care. Maybe snow removal.

The answer with everything in RE... it depends.

DL

[Dantilla]

Just another example of how worthless a Zillow estimate is.

Notoriously inaccurate.
Mention "Zillow" to any real estate professional. A polite one will just give a pained eye roll.
Not-so-polite ones will run from the room screaming, after punching you in the nose.

[Bugsinrugs]

Yes ,we pay water and lawn care

[944 S2]

The issue with Zillow is it’s all Al Gore Rhythm! They have never been inside your home to evaluate. I would simply look for sold units that are similar in size and condition to get a ball park. A good Realtor ultimately is your best bet.

[look 171]

Comps are pretty easy. Get down near the bottom of those site and see sold prices on similar buildings near you. Your will sell for similar number.

[JavaBrewer]

Originally Posted by look 171

Comps are pretty easy. Get down near the bottom of those site and see sold prices on similar buildings near you. Your will sell for similar number.

^ this

[sammyg2]

According to zillow: in 2020, the value of my home shot up roughly $200,000.
Then in the last six weeks, they say it dropped $85k even though prices in the area didn't.

I don't believe zillow is an accurate valuation tool.
A good RE agent who specializes in commercial rental properties can give you a much better idea.

[widebody911]

Originally Posted by porsche4life

Zillow isn’t a good tool for valuations.

There, FTFY.

[Bugsinrugs]

Thanks guys. I’m trying to get a close idea of it’s worth and when I get a call from these investment groups I can throw out a high but reasonable number.

[look 171]

If you are series about selling, why deal with those guys? Call a legit agent and you will get your place sold without headaches. Spending your time with your family is worth not dealing with the BS. Imo, you are spinning your own wheels with them. They wrote the book on buy low, sell high and are experts at it.

If you are concern about your agent making their percentage, it may also be negotiated on large selling numbers but I never haggle about that unless its outrages. Good luck.

[porsche4life]

Originally Posted by widebody911

There, FTFY.

Lol, I totally agree, but I wast just trying to give more information about why. 🤣

[Nick Triesch]

I think Zillow is about right on here in San Diego. H hi ones here have been selling pretty close to the zestimite

[otto_kretschmer]

Originally Posted by Bugsinrugs

I own a triplex in Reno that Zillow estimates each unit being worth $440,000. Yet the entire building is estimated at $770,000. I don’t understand the logic. The reason I’m looking at it’s worth is because I’m getting flooded by investors asking me what I would sell it for.

tell them to make an offer, they never give a number

I don't even answer the phone anymore unless I know the caller

[drcoastline]

Originally Posted by Bugsinrugs

I own a triplex in Reno that Zillow estimates each unit being worth $440,000. Yet the entire building is estimated at $770,000. I don’t understand the logic. The reason I’m looking at it’s worth is because I’m getting flooded by investors asking me what I would sell it for.

Call an appraiser for a value they will give you value based on the three main valuations methods, capitalization, sales and cost approaches.

Or call a few Real Estate Agents they will give a BPO (brokers price opinion based on recent comps. Some may even provide an opinion based on Capitalization.