Reconciliation of Approaches

[Don Clark]

I know enough to buy positive income streams. Whenever you are done dabbling around the fringes of real estate and want become fully immersed let me know.

You only see things from your perspective, you need to broaden your circle of colleagues.

I know a few guys with broken English, a pencil and the back of an envelope that could teach you a thing or three. You don't even know what you don't know.

Zaionarra Pete.

You guys should get a room and express that love you have for each other in a meaningful way

 

[Terrel L. Shields]

the rent can't cover the carrying costs, so no sane individual is going to purchase a property just to rent it out to someone else and have it burn a hole in their pocket.

I just appraised a car wash...one comp was bought and yes, it is burning a hole in the buyers pocket...

In our area, the duplexes that are selling are indistingushable in pricing regardless whether one side is owner-occupied or not....driving down the street I cannot tell which are rented and which are owner occuped.... The fact an investor is paying less is a tribute to their patience. And during the boom from 2000 - 2007, the investors were selling property. I know few investors who do not both sell and buy. One older fellow I know unloaded about 20 old houses. He is now accumulating more. I would say he has bought at least 4 income properties this year....only two were income properties prior to the purchase... I cannot tell you that one sells higher than the other.

If renting is "burning a hole in your pocket", the so is buying it. You will be paying more for holding costs than you are for renting elsewhere. If the mortgage deduction is taken away from Owner-occupied dwellings, then any gap between renting and owning will flip as property taxes offset the mortgage deduction.

If you live in rent control areas, then the financial situation might be different. I don't know. I know that rented or occupied, my nephew has a house that is going to sell for the same price, regardless.

 

[CANative]

I know that rented or occupied, my nephew has a house that is going to sell for the same price, regardless.

You mean sellers don't have two-tiered pricing: One for OO's and one for NOO's?

 

[DTB]

I know that rented or occupied, my nephew has a house that is going to sell for the same price, regardless.

Really? Think there's a huge pool of buyers looking for that property that your nephew just leased for 11 more months?


You guys just keep doing what you're doing, it'll be fine.

 

[Mr Rex]

Some folks make hay when the grass is green, others have calves that get the scours. Around here you can buy rental property for pennies on the dollar, but rent prices are also dropping as the tenants move to the latest and greatest with new carpet and paint offered at a discount to attract new tenants. Often without paying the last few months rents and wrecking the place on the way out. I've noticed more For Rent signs in yards lately than any time in probably 10 years. All those potential homeowners that got foreclosed on apparently aren't flooding the rental market, they are doubling up with mama and daddy or other relatives. Some of the renters migrated way south, to double up with mamacita or papacita, since they are no longer being paid under the table to build all the excess housing inventory. :new_smile-l:

 

[Webbed Feet]

Can the approaches be reconciled in one or two sentences? How far does one need to take the quality/quantity and applic. and relevance, methods and techniques. How brief can this be...or how long should it be. Brian Underwood from the NH Real Estate Appraiser Board states that, "These requirements in USPAP cannot be accomplished in one or two sentences". Is this just opinion, I know it's not in USPAP...how can HE state it can't be done. Is this in fact a violation of USPAP in itself?

Thanks,
Kathleen

Prove him wrong. Just type a couple of paragraphs without using any periods.

 

[jimmyfrank]

And, I don't believe you. They are not applicable. They are not required and would serve no purpose.

Not applicable:

impracticable, impractical, inapplicable, nonpractical, unusable, unworkable, useless

And a waste of time!

 

[Terrel L. Shields]

Think there's a huge pool of buyers looking for that property that your nephew just leased for 11 more months?

There is no such thing as a 12 month lease in this country. They are all monthly for all practical purposes. And yes, the absorption rate is low. We have a ton of property on the market. But there are a number of properties are lease to own which is a pita for valuing but buyers are buyers and the value of a house is what it is...there are not 2 values for a SFR... The GRM is consistent even if it "converts" from OO to Rented.

 

[The Warrior Monk]

I just appraised a car wash...one comp was bought and yes, it is burning a hole in the buyers pocket...

I used to see this prior to the credit bubble. The reason was either that the lease was going to be up within a relatively short period of time, or the investor expected a big return on the back end (reversion). Since the credit bust, this activity has come to a screeching halt...and I mean screeching; it simply no longer exists.

 

[Lee Lansford]

Can the approaches be reconciled in one or two sentences? How far does one need to take the quality/quantity and applic. and relevance, methods and techniques. How brief can this be...or how long should it be. Brian Underwood from the NH Real Estate Appraiser Board states that, "These requirements in USPAP cannot be accomplished in one or two sentences". Is this just opinion, I know it's not in USPAP...how can HE state it can't be done. Is this in fact a violation of USPAP in itself?

Thanks,
Kathleen

OK, back to the OP.

I admit that I have not read all of the posts prior to what I post here, so, my apologies if this has been previously addressed.

What I SUSPECT what Mr. Underwood might be addressing is this: The necessity to reconcile each of the approaches individually and, following, a reconciliation of all approaches in arriving at the opinion of value.

I may well be in error...but, this is my best guess.