Record-Breaking 4-Unit Sale in Mesa, AZ

Challenges

The sale of a fully renovated 4-unit investment property in Mesa, Arizona, was met with a significant valuation hurdle. Though the property was under contract at 96% of the list price, the lender-assigned residential appraiser—chosen solely due to the 4-unit size—valued the property using sales comparables instead of the more relevant income approach. This led to an appraisal that fell below the contract price, despite the income approach supporting a valuation of $1,200,000.

The seller, JML Investments LLC, had purchased the property at the peak of the market in 2021 under a 1031 exchange deadline. After gutting the property to the studs and renovating during a period of inflation and surging construction costs, the seller’s goal was to recover their full cash investment. The buyer had a buyer’s agent from their downleg. With high stakes and minimal room for concessions, a precise, well-defended valuation was essential to keep the deal on track.

Strategy

The Matthews™ agents expertly navigated the valuation discrepancy and due diligence demands. Recognizing that appraisal could be a roadblock, the team came prepared with comps and supporting evidence that highlighted the property’s strong income performance. When the initial appraisal failed to reflect market reality, they successfully lobbied all parties to extend escrow and request a reappraisal. Though the second appraisal returned unchanged, the agents leveraged this outcome to push for an internal desk appraisal, which ultimately allowed the lender to move forward based on the income valuation.

The agents also executed a meticulous due diligence process. They coordinated with all warranty-backed contractors (HVAC, pest control, and more) and scheduled their visits under one streamlined tenant notice. This not only avoided tenant disruption but also ensured the seller provided a $0 concession option—key in preserving their financial outcome.

Result

The transaction closed just 10 days after appraisal resolution, setting a record sale price for a 4-unit property in Mesa, Arizona. The seller successfully recovered their investment, thanks to the expert handling of pricing, valuation defense, and deal execution by the agents. The buyer—a Texas-based investor completing a 1031 exchange out of California—secured the most renovated 4plex in the area.

Client Testimonial

Sara Kuglin and the team at Matthews worked tirelessly to get the price we knew the asset was worth. From the moment we were introduced, through post-closing conversations, we were proud to be on the same team. She knew we were accomplishing an impactful transaction and showed an unwavering determination to win.

Sara was always reliably available and responsive, often updating us throughout the progress of the sale. Every time we reached out, we knew she would be there, ready to help in any way she could. She was consistently willing to give the time to educate everyone involved. Sara being honest, clear, and knowledgeable as she is, is how we made it to the closing table.

There is a difference between conducting a sale and guiding a team through the face of adversity to drive everyone forward toward a common goal. These transactions, especially record-price transactions with no comparable sales, require a strong team, creativity, and passion.

We never doubted it was the right move to have Sara on our side of the table. She was our rock throughout this process. We left each conversation throughout the transaction in a better place than we went in. We have already recommended Sara to fellow multifamily investors whom we hold in high regard. If you get the opportunity to work with Sara, take that opportunity.