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Old 09-20-2004, 05:08 PM
Dave Dolan Dave Dolan is offline
 
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I was asked today if I could do a drive-by appraisal of a duplex. My take is that you can not appraise a duplex without an Income Approach evaluation. I have only done this via a full 1004 or a 1025. I am interested in any advice or experience to the contrary.

Thanks,

Dave
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Old 09-20-2004, 05:16 PM
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Richard Carlsen Richard Carlsen is offline
 
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Although I officially do not do income producing properties (unless I am talked into it by a favorite LO) my thoughts are that there is nothing in the Income Approach that requires you to go inside or even look at a property. It is all numbers so if they fax or email you the data, drive-by the property, take some pictures as you go by, turn around and drive by the other way, taking more pictures. This is how you justify the additional expense of an income appraisal.

If you are confident that the interior information provided and any official data you may be able to obtain is valid, there is no reason why the Income Approach would require you to go inside of a property.
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Old 09-20-2004, 05:17 PM
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I have had a "drive by" done on my multifamily. So it CAN be done. I did one once and I wouldn't do one again. A royal mess.

But...Just b/c you don't view the inside doesn't say that you can't ask for lease information.
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Old 09-20-2004, 05:19 PM
Randy Beigh Randy Beigh is offline
 
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Dave

What is the intent of the appraisal?

Why do they need a driveby or better put, why don't they want an interior?

There is nothing in USPAP that requires an interior inspection or an income approach.

Used to work for a company that only did driveby's. The company bought privately owned paper, so we could not get inside of the property as we were dealing a past owner, not the current owner.

I would think common reasons for ordering drivebys are portfolio property, foreclosure situations, and the above mentioned.

Some people do not feel comfortable doing driveby's and if you like that, turn it down.
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Old 09-20-2004, 05:24 PM
Dave Dolan Dave Dolan is offline
 
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I agree that there is no need to go inside, necessarily, but the drive by forms that I have used do not have a place for the valuation via the Income Approach.
I do not think a duplex's value can be accurately determined without the Income Approach!!!!

Dave
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Old 09-20-2004, 05:27 PM
Dave Dolan Dave Dolan is offline
 
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I should have added to my last reply that the duplex is in an area where the predominant occupancy is by tenants.
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Old 09-20-2004, 05:27 PM
Jim Bartley Jim Bartley is offline
 
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Who says you have to use a "drive by" form to do a "drive by"?
  #8  
Old 09-20-2004, 05:32 PM
Dave Dolan Dave Dolan is offline
 
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The 1004 Appraiser's Cert section assures the client that I have inspected the interior and exterior. I suppose I could modify that but I think the primary issue is that I feel I should do an Income Approach to value and if it's a drive-by, what form can I use?
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Old 09-20-2004, 05:39 PM
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Ryan Nyberg Ryan Nyberg is offline
 
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Quote:
The 1004 Appraiser's Cert section assures the client that I have inspected the interior and exterior. I suppose I could modify that but I think the primary issue is that I feel I should do an Income Approach to value and if it's a drive-by, what form can I use?
Do they want it on a 1004 or 2055? The only driveby's I have done on 2-4 family properites were on the 2055 form. These were for pre foreclosure purposes, or when the LTV was low enough that the client wanted something for the file (IE one was owned for 15+/- years and were refing principale owned to lower interest rate on 10 year loan). You also have to consider you can departe from the cost and income approach when the departure would not affect the credibility of the appraisal report or findings.
  #10  
Old 09-20-2004, 05:40 PM
Jim Bartley Jim Bartley is offline
 
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Well, a couple of things come to mind. First, if the client knows that this a Duplex and they still want a drive-by, then they probably don't really need the income approach. Call and ask. If they do and they still want a drive by, then I think you could use either form with proper addena and disclosure.
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