Extraction Method

[djd09]

Ale is very good at making an argument for the least amount of due diligence an appraiser can get away with. Which I guess is okay, particularly for some BIG and GREAT institutions.

That didn't take long.

 

[alebrewer]

I've been toying with the idea for several years of tracking GIMs in relation to the RE cycles as an indication of where the current rent/price ratios are in relation to the highs/lows of the previous RE cycles. That sort of analysis wouldn't be all that useful in developing an opinion of MV but it might still yield some meaningful info to a reader as to what kinds of risks they're running by offering a 95% LTV now as opposed to 3 years ago when the GIMs were a lot lower.

In similar fashion, I've recently been playing with curvolinear regression, as it relates to sales price and GLA, just to see at what GLA, in a particular market, the law of diminishing returns takes effect. Again, not really relevant to developing an opinion of MV, but fun nonetheless.

 

[Michigan CG]

That is different than saying that an income approach isn't credible just because it's not an income producing property...

I didn't say it is not credible.

 

[alebrewer]

I didn't say it is not credible.

I know you didn't. Zephyr did.

 

[Zephyr999]

Still waiting on Zephyr to teach me why the income approach would not be credible just because a property is not income producing?

Not true...at least not getting any 'teachable' vibe thus far.

 

[alebrewer]

Not true...at least not getting any 'teachable' vibe thus far.

I sincerely am. I'd be VERY interested to know why an IC isn't applicable just because a property is not generating income...

 

[BRCJR]

In similar fashion, I've recently been playing with curvolinear regression, as it relates to sales price and GLA, just to see at what GLA, in a particular market, the law of diminishing returns takes effect. Again, not really relevant to developing an opinion of MV, but fun nonetheless.

You related to Bert?

 

[alebrewer]

You related to Bert?

Bert on Sesame Street? If so, it's quite possible...

Seriously, though, I have no idea to whom you're referring?

 

[George Hatch]

I sincerely am. I'd be VERY interested to know why an IC isn't applicable just because a property is not generating income...

But weren't you using more/less the same rationale about the CA?

 

[Michigan CG]

Wouldn't paired sales analysis most likely be more reflective of what the market would be willing to pay for a garage, as compared to a depreciated cost basis?

Paired sales is cited by many appraisers who have never developed a paired sale in their career and would have people believe that they are hanging like fruit from a tree.

Paired sales, if one really has them, are the result of the depreciated cost. If one truly finds a paired sale for say a bathroom and that paired sale shows $6,000 and the cost new of the bathroom is $12,000 then we have an indication that the bathroom improvements have suffered 50% total loss.