Legal two family, used as two family, was purchased as two family, separate utilities and entrances- client want appraisal as one family?

[glenn walker]

Has nothing to do with what I or the owner wants it to be.

The OP has not provided any information to determine if the two unit property is a income property or not. If it is something like my market where these rowhouses are like two or three level homes with legal second unit in the basement in zoning that allows 1-4 units, then it is a single family property with ADU. They are marketed as single family properties with legal second unit in the basement, 95% are purchased by owner occupants, and it's rare when both units are rented at the same time which is what income property buyers do. Two legal units doesn't automatically make it a two unit income property.

Now if the properties you are talking about are typically purchased by investors purchasing the property for income, then yes you have a two unit income property.

What are you talking about -Quote from OP- I inspect the property and find that it is two family home, functioning as two family, separate meters and entrances, etc.--Thinking-Thinking-Thinking-- Gee it looks like 2 units, functions as two separate units, tenants have individual utility bills, its zoned for units, what elses do I need to know ?

 

[sandpiperapp]

CO for two family? Taxed as a two family? Used as a two family? I guess it is a two family. Is the Highest and Best Use as a two family. That question can be tough to answer in certain parts of Brooklyn where two families are being converted into single family homes. Park Slope, Carroll Gardens, Brooklyn Heights, Bedford Stuyvesant. The lender can ask for anything they want, but you have the final decision. If Highest and best use is as a two family, personally I would use the multi family form, as it is best designed to present a clear picture of your subject. A one family form would need to many changes and additions to be useable and not misleading. Unlike the rest of these yahoos, James Micozzi and myself actively work in Brooklyn. If a lender insisted on a URAR, I would walk. Life is to short

 

[Joe Flacco]

I don't know who this dude Waltenburg is but he gets it.

Appraising: What Is This Two-Unit Property?

So you have a two-unit property that needs to be appraised. Simple enough, but how should it be classified and reported? Is it a small, income-producing, two-family property that needs to be reported on the Fannie Mae 1025 form, or is it better described as a single-family residential (SFR) home...

www.housingwire.com

 

[glenn walker]

CO for two family? Taxed as a two family? Used as a two family? I guess it is a two family. Is the Highest and Best Use as a two family. That question can be tough to answer in certain parts of Brooklyn where two families are being converted into single family homes. Park Slope, Carroll Gardens, Brooklyn Heights, Bedford Stuyvesant. The lender can ask for anything they want, but you have the final decision. If Highest and best use is as a two family, personally I would use the multi family form, as it is best designed to present a clear picture of your subject. A one family form would need to many changes and additions to be useable and not misleading. Unlike the rest of these yahoos, James Micozzi and myself actively work in Brooklyn. If a lender insisted on a URAR, I would walk. Life is to short

Good points, and you work Brooklyn -This is why geographic competency is so important, appraising is so area specific and with a forum thats National - We can often give some very poor advice, good intentions but entirely wrong. Highest & best use analysis is probably one of the most butchered parts of residential appraising. In my area City-County planning departments are very strict now on Zoning, Land Use, General Plan or road map for future development. Back in the day we had a lot of legal Non-Conforming properties but as governmental agencies became more and more restrictive, its become almost impossible to take a existing use and turn it in to another use. Permits, Entitlements, environmental study's etc most often take out the portion of H & B use of being financially feasible.

In residential, my estimate is that 90% of all single family residential and 2 to 4 units in my area will never be able to be changed to another use. Just building a block wall out here has become a major thing, with earth quake proofing, and 3 to 5 visits by Code Compliance inspectors. And to build new home in Los Angeles County is a 2 to 3 year process , 2 to just try and get through planning and to get approvals. Most of the small builders have picked up their marbles and left the County for good. One 1,200 Sq.Ft. home ended up costing us $125,000 just to get the 7,000 Sq.Ft. lots entitlements and final approvals. I have been to other States where there is no building department, no zoning and the H & B Use is whatever you want to make it . So there Ya go you have to know your specific market area. As we say out here hey Toto this is not Kansas don't get to excited about converting or building anything new- Unless Bill Gates is your Rich Uncle ; )

 

[Joe Flacco]

There is no conversion or construction or any approvals involved. What exists is a legal two unit property that is perceived by the market as a single family property with accessory unit. It is not that complex of a concept.

 

[Joe Flacco]

Look at the title of the form. Small Residential INCOME PROPERTY Appraisal Report. Form for INCOME PROPERTY. Property that the probable buyer is purchasing the property for INCOME.

 

[glenn walker]

There is no conversion or construction or any approvals involved. What exists is a legal two unit property that is perceived by the market as a single family property with accessory unit. It is not that complex of a concept.

Perceived by the market ? or Perceived by the appraisers own wants and desires ? And flawed understanding of how to do a H & B use analysis. In your assessment if the lender wants it on a 1004 then somehow cram it onto a 1004. The problem is- its a great way to get charged with creating a report that is not credible and not supported.

 

[Joe Flacco]

Perceived by the market ? or Perceived by the appraisers own wants and desires ? And flawed understanding of how to do a H & B use analysis. In your assessment if the lender wants it on a 1004 then somehow cram it onto a 1004. The problem is- its a great way to get charged with creating a report that is not credible and not supported.

You are confused.

You think that two legal units means that it automatically goes on a income property form. 2 Units, 2 separate meters, 2 separate entrance, done deal. It is a income property. Whoever taught you that taught you wrong. You probably have been doing it wrong for 30 years.

 

[glenn walker]

You are confused.

You think that two legal units means that it automatically goes on a income property form. 2 Units, 2 separate meters, 2 separate entrance, done deal. It is a income property. Whoever taught you that taught you wrong. You probably have been doing it wrong for 30 years.

Would love to see your response to a Fannie or HUD post closing review letter. I thought I saw a Puddy Cat - but it turned out it was a Pit-Bull but my H & B use instructor at Mac-Kinsey online school , told me that its all about perception. And me perceived that if I didn't follow my engagement letter from Bulls-Eye & Speedy my favorite AMC to do it as a SFR on a 1004 form I would never get another assignment. Therefore the longer and harder I looked at those 2-units, the more I could imagine it being a single family residence. That's when I decided to checked the ADU Box-and crammed my SFR comps into those grids and Bingo.

As Uncle Billy says , the great thing about-being delusional is you are easily contradicted by reality or rational argument or debate. We call that "alternative facts " Is the Glass Half-Full ? or is it Half Empty-Neither answer is right or wrong, it's like your H & B use analyses- You look at a 2 unit property and see a single family home.