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$380,000 commercial grade garage for car collector

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Ultraviolet

Senior Member
Joined
Dec 31, 2002
Professional Status
Retired Appraiser
State
Arizona
Need some help on this one.

Property includes 3.5 acres, 3,200 SF home w/attached 3 garage, pool, tennis court and this behemoth detached commercial grade garage. Seriously, this garage is better than any mechanic's I've been to!! The owner is a car collector and paid $380,000 for a 3,200 SF garage that is of block construction with a steel roof, heated/cooled, bathroom, car showroom, RV carport with separate septic system, etc.

The best I could find was one comp with 7 total garage spaces, another with 6.

I know it's a superadequacy - and fortunately, so does the owner. Any input on how to value and report would be helpful - thank you!! :D
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
I think you do the best you can do with the market data you have. And your right, it's gonna be hit hard with depreciation as an over improvement. You may need to consider the cost approach too. It's tuff to make properties like this fit on the URAR, but that's what the lenders want. A long addendum with a cost approach will help the UW see what you are thinking.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Rae:

Will zoning permit any alternate use than glorified garage?
(what's H&BU? :? )
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
Can you say "Complex Appraisal Assignment". Does your license level permit you to do this type of assignment?
 

rtubbs

Junior Member
Joined
Jan 15, 2002
I don't like to see my work dwindle but I really believe that people with these type properties should not be allowed any financing. Let um pay cash for all the frills.
 

Jeff Horton

Senior Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Alabama
Sounds like some of the horse barns I have run into lately. What I did on them was use the cost approach to get a starting number. Then tried to pull a return out of the market data. You might find something else just as oddball and see what if any return there is on it when it sold. I finally settled on horse barns returning about 25% of their cost.

As a car nut I can picture what you talking about. However how many people have a need or can afford it? His return on the cost might be 10-25%. In my are it could be close to 0%.
 

Carnivore

Elite Member
Supporting Member
Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
North Carolina
Rae,

I hope this is helpful. I approach these from a slightly different view. I look at the property as if this did not exist. I prepare the best report I can. Then I focus on determining the contibutory value. The reason is simple. I think the improvement takes to much center stage. Your focusing to much on it to solve the owners problem. If the dang thing burns down tomorrow then whats the property worth tomorrow.

Simply, It sounds like a tough assignment in spite of the extra garage!

Good luck, re-examine your fee!

EDIT: I had a second thought after I posted. I think the cost approach is not applicable as pertains to the garage. The reason is simple. If this is a commercial grade garage then those cost typically are based on some income stream data in a commercial setting. Commercial cost data is totally inappropriate market data for residental cost. The typical motivations are just not there.
 

Ultraviolet

Senior Member
Joined
Dec 31, 2002
Professional Status
Retired Appraiser
State
Arizona
Thanks for all the input everyone. I will talk to my boss about how to complete the assignment.
 
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