A MultiFamily Question on Adjustments

[Stone]

Ok Stone- I see the quality of your posts is not going to change. I get it, your scared, so time to ignore you. I didn't think you would run from a girl and a trainee to boot.
Here's a deal for you boys- If Property will post his real name and license number then I will give you guys something in return. No more hiding Property!

Awwww....no more cute posts SANDY?

This is exactly the level of debate that appears reasonable for you. Why would anyone spend time trying to seriously discuss an issue with you? Someone who knows (just KNOWS) that the experienced folks are stupid fossils.

Several people tried to share their thoughts with you and were met with attacks by someone who clearly didn't understand everything that was written.

I'll just continue to hide so I don't get my legs shortened.

 

[CANative]

I'll make one more attempt to help SANDY.

The Appraisal of Real Estate, 12th Edition, Page 438.

Paired Data Analysis
Although paired data analysis is a theoretically sound method, it is sometimes impractical because only a narrow sampling of sufficiently similar properties may be available. This is particularly true for many commercial and industrial properties and properties that do not sell frequently in the market. This makes it difficult to quantify the adjustments attributable to all the variables present. An adjustment derived from a single pair of sales is not necessarily indicative, just as a single sale does not necessarily reflect market value.

When sufficient data is available, the method can be helpful and persuasive, but when judgments are substituted for market-derived adjstuments, the process can be misleading. Even when limited data is available, however, the appraiser should not discard the technique. Rather, the appraiser should estimate the amount of adjustments indicated by the data and use other analytical procedures or secondary data to test the reasonableness of the adjustent derived.

Quantitative Adjustments
Several techniques are available to quantify adjustments to the sale prices of comparable properties:

- Data analysis techniques (including paired data analysis, grouped data analysis, and secondary data analysis.

- Statistical analysis

- Graphic analysis

- Trend analysis

- Cost analysis (cost to cure, depreciated cost)

- Capitalization of rent differences

 

[Willie]

Thanks Greg. Are those crickets I hear chirping in the silence? How nice.

 

[SANDY]

Ok Greg- I think it was you that brought in the scenario of what to do when there is little sales data to use for paired sales analysis. But I think that Property was saying that in his case he did have adequate sales data.

Your example above talks about cases where there is not an adequate sample of comparables available and it also mentioned that this occurs mostly in commercial and industrial properties because they sell less frequently. I think we can all agree so far.
Your post goes on to to say that even when adequate data is available that judgements made can be mis-leading-no kidding but the same is true for grm based adjustments-they can also be misleading unless you have perfect matches to develop your grm and assuming that you don't have to adjust(judge) your comparable rents to account for things like long term tenants, utilities included or not included etc etc... Every type of data has its own potential or even inherent flaws hence the need to utilize different methods within the different approaches.
Many times I have used the cost approach to estimate an adjustment for a particular difference between my subject and a comparable sale in the sca ,if I find that I do not have adequate sales comparison data for that particular item. But the difference is that I never use the cost approach as an exclusive basis for my adjustments in the sca especially when I have data available to use a more traditional sca method. Checks and balances.

Hence the statement above that says even with the lack of data, the appraiser should discard the techique-ie... even though the method may not be as reliable as other methods it should not be discarded. Yes other methods listed after that statement should be used but not only one method should be used to the exclusivity of th eother methods. Otherwise there would be little or nothing left to reconcile.

 

[Michigan CG]

I'll make one more attempt to help SANDY.

The Appraisal of Real Estate, 12th Edition, Page 438.

Paired Data Analysis
Although paired data analysis is a theoretically sound method, it is sometimes impractical because only a narrow sampling of sufficiently similar properties may be available. This is particularly true for many commercial and industrial properties and properties that do not sell frequently in the market. This makes it difficult to quantify the adjustments attributable to all the variables present. An adjustment derived from a single pair of sales is not necessarily indicative, just as a single sale does not necessarily reflect market value.

When sufficient data is available, the method can be helpful and persuasive, but when judgments are substituted for market-derived adjstuments, the process can be misleading. Even when limited data is available, however, the appraiser should not discard the technique. Rather, the appraiser should estimate the amount of adjustments indicated by the data and use other analytical procedures or secondary data to test the reasonableness of the adjustent derived.

Quantitative Adjustments
Several techniques are available to quantify adjustments to the sale prices of comparable properties:

- Data analysis techniques (including paired data analysis, grouped data analysis, and secondary data analysis.

- Statistical analysis

- Graphic analysis

- Trend analysis

- Cost analysis (cost to cure, depreciated cost)

- Capitalization of rent differences

Is there a cover charge for the entertainment?

 

[PropertyEconomics]

For the record ... the subject property was in a town of 7,500 residents and I used the four sales of multi-family properties that had been consummated in the prior 18 months. Adequate data for analysis yes. Perfect data as opined by some .. not on your life. I felt the data was good and adequately measured the value of the subject.
If those here who are far superior than I and on STILTS would like to express the opinions of their puppeteers ... by all means have fun.
I personally think the ignorance in this post has gotten rampant .. and I was the one to ask the original question.
Is there any way that one can be barred from posting in a thread? Oh yes there is .. it has happened to me when I have been as rude as Sandy has. Hmmmm wonder why they moderators arent watching ... or maybe they are laughing their *** off. Thats my bet.

 

[Hamlet]

Well, PE you have you admit, it has been pretty funny. Besides, what else is there to do on a cold snowy December day with no work?

 

[PropertyEconomics]

Well, PE you have you admit, it has been pretty funny. Besides, what else is there to do on a cold snowy December day with no work?

Practice dancing backwards perhaps ..... .

 

[SANDY]

Tim- Where is it in this entire conversation that anyone ever said that we were talking about a single set of matched pairs. You can bold anything you want but at least don't do it for obvious. Why don't you post a list of things that we were not talking about and bold it if you think it will make your point

 

[CANative]

Are you Bobby Bucks?