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multi family ?

Discussion in 'General Appraisal Discussion' started by mp2277, Oct 12, 2010.

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  1. mp2277

    mp2277 Junior Member

    6
    Mar 21, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Virginia
    5000 sf house built in early 1900's with a carriage house apartment in the back yard. The main house has been turned into 4 units, 2 above grade, 2 below. Is this a 5 unit, or a 4 unit with an accessory unit. I have nothing to do with this assignment, just overheard a conversation between two appraisers and a Realtor. Ironically, both appraisers made good arguments. My first opinion ws that it was a 5 unit, however, listening, I am tempted to think it is a 4 w/ accessory unit. Of course I know why it makes a difference, neither of them were CG's, but am curious as to other opinions.
     
  2. zdfenton

    zdfenton Junior Member

    2
    Nov 13, 2008
    Professional Status:
    Certified General Appraiser
    State:
    Wisconsin
    It really comes down to highest and best use, is it legally permissible and does it have the potential to draw a rent

    On a side note I do know for a fact Fannie has been forcing lenders to buy back loans based on appraisers (and lenders) ignoring 5th units (accessory units, basement units, etc)
     
  3. CANative

    CANative Elite Member

    251
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Funky 5-unit residential income property. IMO and without knowing anything else about the property.

    You can't have multiple units and an accessory unit for GSE purposes in any case.
     
  4. David Wimpelberg

    David Wimpelberg Moderator Staff Member Moderator

    75
    Mar 30, 2005
    Professional Status:
    Certified General Appraiser
    State:
    New York
    My answer is based on the assumption that all units are legal.

    Call the units what you want, but

    4 units + 1 accessory unit = 5 units.
     
  5. Mike Kennedy

    Mike Kennedy Elite Member

    184
    Sep 28, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    New York
    The Answer s/be predicated on Due Diligence confirming:

    1. local municipal zoning AND building ordinances in effect?
    2. C. of O./Compliance for "turned into" conversion from SFR required and obtained?
    3. was a C. of O. for finishing the basement in a Vintage 100+ year old home required i.e. finished bsmt only, then .......C. of O. for two basement apartments
    4. WHEN were the conversions done i.e. PRE-zoning & building ordinances or POST?
    5. Once Legally Permissible Use(s) (as of the Effective Date of Appraisal) has/have been established, look to the Market to demonstrate which Use clearly is HABU.
     
  6. AnonApprsr

    AnonApprsr Elite Member

    0
    Jan 21, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Massachusetts
    5 unit in my area, with perhaps greater rent on the detached unit. Of course, if it's recognized by the town as legal, that'd be swell.
     
  7. leelansford

    leelansford Elite Member

    45
    Mar 29, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Illinois
    I always get a kick from discussions as to whether or not a particular property is "this" or "that" with no discussion as to what might be legally permissable or whether or not there is zoning applicable to the property under discussion.
     
  8. mp2277

    mp2277 Junior Member

    6
    Mar 21, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Virginia
    To clarify, it is legal, zoned properly, CO's from city for all 5 units, should have stated that up front I guess. HABU is as it is and this type of housing is common in that area of town. Grandfathered as multi family. TY
     
  9. CANative

    CANative Elite Member

    251
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    The 4 unit plus accessory unit is a lender trick. Don't fall for it.
     
  10. Denis DeSaix

    Denis DeSaix Elite Member

    234
    May 16, 2005
    Professional Status:
    Certified General Appraiser
    State:
    California
    Agreed.

    If the four units are rental units, how is the 5th unit an accessory unit and not another rental unit?

    Accessory reflects something supplemental or subordinate to the primary use.
    An accessory unit can be supplemental or subordinate to the primary use of a single-family residence.
    I don't see how a unit which is a rental (or would serve as such) can be supplemental or subordinate to a rental-income property with multiple units? :)
     
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