Illegal Unit In Apartment Building

[CANative]

Property rights. There is no right to collect the income from the bootleg unit. But sometimes they still do. It is risky because it could come to an end if the jurisdiction pushed back and made them stop.

That's why I was thinking along the lines of treating it like excess rent and adjusting the cap rate upward (or selecting a cap rate higher in the range.)

 

[hastalavista]

@CANative
If I say the unit is illegal then it is illegal. Things are getting overcomplicated by assuming I haven't confirmed what I already stated as fact.

I will be talking to the brokers on both sides to determine the estimate of contributory value of the illegal unit and I will be talking to the local jurisdiction about the status of the subject property and the seller about the workmanship and reasoning for not getting permits. I will come to a conclusion of the contributory value and make sure to disclose boldly in the report that one unit is an illegal unit.

Now go back to badgering each other.

I'm not nit-picking or badgering you.

Edit: The 13th unit is unpermitted and illegal as the site is zoned for 12 units only.

This would have changed the dynamic of the conversation; although what was discussed is useful.

 

[NachoPerito]

I'm not nit-picking or badgering you.


This would have changed the dynamic of the conversation; although what was discussed is useful.

I didn't mean to imply that you were badgering me. I was just referring to the badgering of each other going on throughout the thread. Your comments are well received.

-Nachu Picchu

 

[hastalavista]

I didn't mean to imply that you were badgering me.

I didn't think so but inelegantly omitted that in my post.

 

[Joe Flacco]

I didn't mean to imply that you were badgering me. I was just referring to the badgering of each other going on throughout the thread. Your comments are well received.

-Nachu Picchu

Is Nachu Picchu your real name? How do you pronounce that? What country are you from?

 

[CANative]

Is Nachu Picchu your real name? How do you pronounce that? What country are you from?

lol

 

[Gobears81]

Is Nachu Picchu your real name? How do you pronounce that? What country are you from?

The queen of Nacho Picchu

 

[DTB]

@CANative - I like the name Nachu Picchu I hope I can use that.

@DTB - Thanks for the vote of confidence (sarcasm). I was interested in the gallery's opinion because appraisers sometimes give no value to an illegal unit because it is illegal rather than analyzing the value of it on the open market. They feel they are hamstrung by rules and regulations and in the residential world, they are sometimes.

If I say the unit is illegal then it is illegal. Things are getting overcomplicated by assuming I haven't confirmed what I already stated as fact.

I will be talking to the brokers on both sides to determine the estimate of contributory value of the illegal unit and I will be talking to the local jurisdiction about the status of the subject property and the seller about the workmanship and reasoning for not getting permits. I will come to a conclusion of the contributory value and make sure to disclose boldly in the report that one unit is an illegal unit.

Now go back to badgering each other.

I wasn't busting on you as much as CAN's snarky comment.

You swing a dead cat around Chicago w/o hitting an illegal apartment. Do they have value? HELL YES, that's why they are everywhere. Find the value of an illegal apartment and apply it to your subject. All illegal apartments are exposed the same regulatory risk but still have value in my market.

Nothing really complicated IMO.

 

[hastalavista]

Do they have value? HELL YES, that's why they are everywhere.

Amazing how simple it is to come to that conclusion when one looks at the market.
Understandable, nonetheless, why it is necessary for an appraiser to go through a specific-process to make that conclusion in the report whereas a market-participant would spend less than 3-seconds thinking about it.

 

[Mike Kennedy]

Coming soon to a theatre near you - Highest and Best Illegal Use.............??