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7200 sf Pole Barn w/2250 sf living space

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hal

Sophomore Member
Joined
Apr 4, 2002
Professional Status
Certified Residential Appraiser
State
Michigan
Take a look at this and tell me your opinion. I was asked the following:


I'm looking to build a 7200 sf pole barn with 2250 sf of living space within. My lender, GMAC thinks this is quite unique, and may have issues with it's appraisal and marketability. I'm very serious about this and know that I'm not the first person to come up with this idea. (We run a landscape firm and this would work perfectly for us.)

Thanks in advance
 

Roger

Junior Member
Joined
Jan 24, 2002
Professional Status
Certified General Appraiser
State
Missouri
I appraised a very similar property that was a sale, about two years ago.

The Living area was not quite as large, but was finished just like a typical newly constructed residence, it just had windows on the two sides with exterior exposure. It started out as a 7200 SF pole Barn.

Unable to find any similar sales, I used comps that were SFR with attatched horse barns, all long distances from the subject. The buyer was going to use it for horses.

Not an easy property to appraise, I would charge myself a hefty fee!!!
 

Verne Hebert

Senior Member
Joined
Feb 25, 2002
Professional Status
Certified General Appraiser
State
Montana
I have appraised 5 of these over the past 10 years. The two most recent were new construction off of drawings and specs which were done in the past year.

I am not aware of the sales of any of these. I have seen a few more recently constructed here.

For sales I used different processes due to varying data at various times in the market.

Marketability is a difficult one to measure--but my take was that the marketability would be no less than a manufactured home with outbuilding(s) of similar utility.

Good Luck!
 

Ed Potrafke

Sophomore Member
Joined
Dec 17, 2002
Did one of those last year, that had sold the year prior. Did a quick search for the previous year, to get an idea of how much the property sold vs normal homes. Verne is dead on, it sold for the same price as similar manufactured homes, with large poles were selling for.


Good Luck,
Ed
 

Farm Gal

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

You have the same idea that many folks around here have had, most of them are intending to live in one end whilst they make thier major fortune and then build a castle located a suitable distance from what will then evolve into 'office' and workspace.

I have seen several of these built, however due to the difficulty in acquiring financing up front, most folks have built the things using thier own money or credit cards, and then try to get financing 'after the fact'.

The problem is that there are no true arm's length sales of such structures as new construction, typically what we are seeing is repo or distress sales (usually due to divorce) which appears to taint the resultant sale!

There appears to be a significant dimunition in value, and market exposure is highly dependant on teh quality of hte interior finishes.

One of the market resistance issues also revolves around what use the attached work-space was used for: if heavy on deseil equipment storage or chemicals (landscaping or ag sprays) left ANY traces of odor, the subsequent buyers tend to discount heavily.

I am aware of 4 similar structures which have gone to repo, one of which may still not have sold (poor quality finish). If you want that data I would be happy to furnish it to you: send me a private message with yoru fax number.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Your lender is exactly right. Marketability of these properties is awful and your property will suffer a huge discount as functionally obsolete. The last two I know in these parts took 2 years to sell for well under the owner's investment. 20 ac. + 2,400 SF w/living quarters done very nicely finally sold for $168K± after asking of $250K. The other was 6,000 SF steel truss on slab with 2,600 SF loft dwelling. $250K invested. Finally was repo'd by bank asking $150K and finally sold 3 years after first offered for $110K. Bank took a hit about equal.

GMAC probably is looking at this more as a commercial loan, not a residential one, with the attendant reduced LTV ratios and higher interest (risk) rate.

If I were asked to appraise this as commercial, I would charge a fee of about $1,200, as residential not less than $3,000 due to all the underwriting feedback the appraiser would surely get.

As long as you recognize this is "home loan" territory, go for it. I would do the same if I had it to do over. Being single the last 10 years, my house is more a nusiance than benefit. I'd be glad to live in an apartment within one of my barns.

ter
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
What you want is a post frame building. This is an approved, though old construction method but with some very definite advantages. The last one I did was in September just south of Charlevoix on the shores of Lake Michigan. The post frame construction allowed for showing the beautiful oak beams and posts. The house (2000 SF) had in-floor radiant heat and was heated by a single 40 gal water heater. Very interesting set up.

I've also done some smaller houses that were essentially converted post buildings. They pop up every now and then.

If you are within my service area (essentially Tip of the Mitt), tell GMAC to contact me and I'll take on the assignment. If you are in the Eastern UP, I'll do that also but will have to have a little extra time and fee.
 
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