I am thinking of selling one of my duplexes so i can consolidate my assets to one area (it is an outlier for me.)

I have no idea on pricing as I've never sold property where ROI is most important. Anyone care to give an opinion?


Built in 2016
3 bed / 2 bath / 1 car garage ~1150sf per side
Rent is 2900 per month - leased long term as is
tax is 2.6%
Crosby TX

I need help creating a price to put it out there. I do not need to sell so just add 10% to your guesses.

Are you aware of how the market has shifted towards favoring buyers vs the sellers? Did you not talk to a local realtor and get their idea on price? Or maybe you did and didn't like the answer, idk.

Either way, you are competing for a smaller pool of buyers (investors) and want to list it at 10% higher than "market". And the market for the asset is a tertiary exurb of the Houston MSA. The only favorable thing you have going for you is the long term leases in place. If ROI is that much of a concern for you, continue to hold the asset while amortizing down the debt at least through the remaining lease term (assuming you are having positive cashflow). Increase your IRR that way.

LOL - you gave a nearly irrelevant opinion. I am shocked someone gave you a star for that post.

I know a great deal about residential real estate. I have an MBA in Finance, but I am not expert pricing using an income approach. Please give me your opinion of starting price as FSBO duplex.

If you use ROI I'd assume you use that a data point not THE driving issue. You also must include fair market value from the market. So if 8 similar properties sold around you at 240-280K then that's your price range. Regardless of ROI.

Not sure if you use a realtor but either way buying an appraisal is pretty low cost option to get what's it will sell.

Cost approach was 275k back in 2016.

Major issue with particular property is the lack of duplexes or triplexes in the area (lots of townhomes sold separate). Only one sold in previous 5 years. The townhomes sell for 165k per unit in a completely different setup.

I'm just lost on the pricing. My wife is a realtor and my father is a broker (40 years). Both are not confident.


I put it up for 300 last year just for kicks and got 5-6 calls before taking it down. I have no clue if any were serious bc I wasn't truly ready to sell.

Your problem is getting Appraisel Comps, no doubt. IF it could be designated rural you would have a much better chance at getting comps. I doubt that could happen.

That leaves you cash investors. Soooo probably list as cash deal only and see what the wolves and sharks will pay. Sorry for your haircut.

Thank you!

I'm part of a investment Facebook group if you want me to post the deal. They are cash guys for the most part.

Contact info in my profile

it is an income generating asset. Value it as a business with 5 years of discounted cash flow.

Do people actually value duplexes using the income approach?

Yes and this a perfect example. You want a buy and hold buyer. They will calculate their own ROI numbers or I prefer Net Present Value. This is a good realty asset for right price. It diversifies well against stocks and bonds.

gig em 02 said:

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Do people actually value duplexes using the income approach?

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at the end of the day the value is only what a buyer is willing to pay.

As a seller you have to determine where you are comfortable liquidating. The buyer either agrees or the market is silent. At that point the seller concedes to a lower price or continues to hold.

Pricing something isn't rocket science.

Very few duplex buyers are house hacking. It's a good way to jump into being a landlord with some risk mitigation. The renters I get are of good profile...mostly due to lower rent...I get more applicants so I can filter better.

I love my duplexes. Only issue is I want more. My goal is to take out my equity and buy more land to build them.

Let me rephrase, do lenders (regular banks/mortgage companies, not hard money individuals) generally lend for duplexes based on the income approach? What metric are they using to determine the value? 1% rule or something? Hypothetically would a lender loan me money to buy this duplex on a 4 cap but I actually buy it on a 10 cap?

Good Question. I've only seen income approach on my investment props once and it was not used by the lender.

For a conventional loan, even on a small multi-family, the borrowers debt to income is used to qualify. So, you can buy a property that does not cash flow if your personal debt to income can carry the shortfall.

There are products for 1-4 units that are underwritten more like a commercial loan where they simply take into account the rent vs the PITI, so in other words as long as the subject property cash flows you are good even if your personal debt to income might not carry the property for a conventional type underwrite.

For most loan types, even hard money that needs an appraisal, a 2-4 unit property will require a small multifamily form 1025 appraisal. Found here: Fannie mae form 1025 So, it combines both rental comparable and market value.

In theory the maximum value would be based on the price that allows for a cash flow of $1?

have a broker who specializes in that market give you an opinion of value. No harm.

3/2/1; built in 2016; 1150 sqft; seems like a good product that offers good space; has universal appeal to good slice of the market. Off the cuff, knowing nothing about that RE market, $325k seems like a reasonable price point based on the rents. Someone paying that for this piece of RE in your market has a lot different factors though.

You are not discounting lack of market liquidity nor some obvious costs. If you are let us know.

Most likely you need a cash buyer or at least private financing AND want a long term cash flow. You have narrowed the pool of buyers considerably

Just throwing something out there like OP asked for initially. Again, I do not know anything about this market, neither do I know anything about this specific surrounding location. From the little I know about Crosby, north of $250k seems pretty stout for the market/area so that could pose a significant problem. In other markets, investors scoop up properties at .80% lease to sales price ratios. As we all know market conditions and location have a significant impact on RE.

Thanks guys for the real discussion - it would definitely have to be a cash buyer for the price i would be willing to let it go for. (dont need to sell)

Again if you want me to put it on my investment group let me know. It's heavily trafficked and nationwide. At least you would get low ball real numbers and go from there.

Rice and Fries said:

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Are you aware of how the market has shifted towards favoring buyers vs the sellers? Did you not talk to a local realtor and get their idea on price? Or maybe you did and didn't like the answer, idk.

Either way, you are competing for a smaller pool of buyers (investors) and want to list it at 10% higher than "market". And the market for the asset is a tertiary exurb of the Houston MSA. The only favorable thing you have going for you is the long term leases in place. If ROI is that much of a concern for you, continue to hold the asset while amortizing down the debt at least through the remaining lease term (assuming you are having positive cashflow). Increase your IRR that way.

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someone needs some attention.

For those that have little to no experience with small multi-family properties, like duplexes, are prone to making judgment errors as they try to understand that market.

What is market value? It is not a number, could be a range and it can change OVER NIGHT! Someone who says I am going to sell 10k over market, might be changing what market value is.

I don't know the Crosby area so it would be hard for me to give an educated input to the specific valuation. However, in my 15 years buying multi-family I can tell you I have seen this market go from very little demand to where we are in Austin in that small multi-family (duplexes) are hotter than any property type out there.

Duplex investing has evolved and is difficult to make an apples to apples comparison to the SFH market. 17 years ago when I started investing in duplexes it was almost exclusively investors buying. NOT ANYMORE. In the Austin MSA, I can't find my 1% rule which I used as a starting point for looking because it was so easy to find.

Case in point, I mentor several people in the Austin area (for the cost of a cup of coffee). A young man wanting to get in the market has been looking for about a year, considering all different types of properties. Yesterday he puts in an offer on a 320k listed duplex bringing in $2400 monthly rents. As an investor, I would not even consider this one but for him, it would be a good buy. He is renting a one-bedroom apt for $950 (no garage). The duplex is 3 beds 2 baths 1 car garage each side built in 1999, in good shape. He goes from shelling out $950 a month to now he's out of pocket for $200 less. He becomes an owner and if he wants to rent out one of his rooms on his side he hits a home run. Market values change rapidly in the Austin MSA. Duplexes I own in Austin have more than double in tax assessment in 24 months. Your typical buyer of SFH is still owner-occupants. Buyers of duplexes are a mix of owner-occupants and investors. In the Austin area, I am seeing more and more owner-occupants as buyers because as a pure investor they are getting too expensive for the buy and hold investor. When you have a mix of different type of buyers, with varying motivations, it gives rise to volatile market movements.

As a broker and General Appraiser, comps are your friend. You can give us all the income data you want, but what is the going cap rate in your area, 5% to 10% makes a pretty big difference.

Comparable sales will give you a good range, and if you can extract some cap rates from those sales, you will have a rate to apply to your property. You may have to get creative with the comps. Use larger multi-family properties, properties further away, but with similar markets, etc.

FYI, I have no knowledge of your market, just some simple advice. Of course, you will need an agent or appraiser who has MLS data.

If townhomes are selling well above the market value for a duplex, you might consider developing a condo regime. It will cost you a few thousand in legal fees but then you can split the units and sell them independently of each other.

dallasiteinsa02 said:

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If townhomes are selling well above the market value for a duplex, you might consider developing a condo regime. It will cost you a few thousand in legal fees but then you can split the units and sell them independently of each other.

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You are ABSOLUTELY Right! The new trend in Austin is the condo of duplexes. A good real estate attorney can do the HOA docs for about 3-4k. In Austin a 350k duplex can be converted to two 200k or higher condos. I have been buying duplexes since 2003 and haven't sold a one. But when I do, I plan on condo-ing them out!

This is fooking Crosby. Do any of you know where Crosby is? What we are dealing with?A Condo? Ok could do but it's a first ever there. So spend 3-4K and then find out if it works?

This has no comps in the last five years. This is a cash flow property. End Stop.

Steve, take a chill pill. Understand the meaning of IF. We're just throwing out CONCEPTS. Yes the market factors are different in Austin compared to Crosby. Condo-ing a duplex in Crosby may not be the thing to do.

But dallasiteinsa02 did preface his comment with "If townhomes are selling.........." and IF, that is correct, just maybe a consideration could be given to the idea of condo-ing. Peace out.