The more homes we find, the more valid our CMA . If we find a few similar properties that have sold within the past 6 months, our job is easy. If not, we have to expand our criteria either by searching through neighboring tracts or by going back further than 6 months. Four-plexes also use a capitalalization rate as well as market data. The acceptable cap rate is what the market considers it to be for properties within a market area and like properties.
Higher rates are for more marginal properties as well as more complex properties.
The following Figure shows cap rates in use. Note that multi-family denotes apartments. The cap rates for four-plexes will range from eight to over ten percent depending upon the area demographics, age and condition. Four-plexes must also have market data of simular properties that have sold. Homes and duplexes use the market data for appraisal purposes.