A MultiFamily Question on Adjustments

[CANative]

Sandy,

The three approaches to value most often discussed here are all interrelated.

Read the first paragraph in Chapter 17 (The Sales Comparison Approach) of The Appraisal of Real Estate, 12th Edition. Note the last sentence:

Similarly, conclusions derived in the other approaches are often analyzed in the sales comparison approach to estimate the adjustments to be made to the sales prices of comparable properties.

 

[PropertyEconomics]

Sandy,

The three approaches to value most often discussed here are all interrelated.

Read the first paragraph in Chapter 17 (The Sales Comparison Approach) of The Appraisal of Real Estate, 12th Edition. Note the last sentence:

Similarly, conclusions derived in the other approaches are often analyzed in the sales comparison approach to estimate the adjustments to be made to the sales prices of comparable properties.

I have no idea what they are saying Greg but I think you are preaching to a rock. Best of luck to you, however.

 

[CANative]

I have no idea what they are saying

I have no idea who you are referring to as "they."

An adjustment for deferred maintenance (curable obsolesence) in the sales comparison approach can be developed by analyzing the costs associated with curing the deficiency. It can be supported by including a sale comp with deferred maintenance and a sale without deferred maintenance.

An adjustment in the sales comparison approach for an unfavorable location (incurable obsolesence) can be developed by analyzing the rent loss associated with the location and then applying a GRM, GIM, Cap rate (etc.) to the amount of rent loss. This can be supported by bracketing the subject with sales of properties with both favorable and unfavorable locations.

 

[SANDY]

Exactly Greg-so where in your example does it say that one would only utilize data from one method to make adjustments in another method? Even you in your example followed up both examples with a paired sales method. I have no problem using the same data from one method to double check the results of another method that used different data.
If you remove both of your last sentences from the examples you gave then you have what Property did-same data same method but done in two different approaches which is misleading. If you have the paired sales data why not use it in the sca?
Property- the three approaches are inter-related but that does not mean that they are the same and that the same methods are to be used in each. They were designed to be checks and balances for each other.
The underwriter is this case was correct in insisting that you perform a proper sca. Now if you had absolutely no good comparable sales, that might be a different story. But you inferred that you had comparable sales so your even more behind the eight ball

 

[Stone]

What a funny thread. Thanks for the entertainment.

 

[CANative]

Ay carumba!!

I just know it's really going to hurt when I eventually pull the duct tape off my head.

 

[PropertyEconomics]

Interestingly enough ... the GRM method has often been touted as a market approach among commercial circles with only the direct capitalization method being the true income approach as analysis of both incomes AND expenses occur.
I think the less informed here will disagree naturally but I leave that to my friend Greg Boyd to fight. I dont have time for idiots who dont know an appraisal from a grocery list.

 

[CANative]

PE.. Next time simply use the enhanced reporting format and save yourself all this hassle.m2:

 

[PropertyEconomics]

PE.. Next time simply use the enhanced reporting format and save yourself all this hassle.m2:

No Greg .. I have heard the comments of my peers .. those who dont matter ... well I ignored them and they dont matter. I thank you for your input and those of all the forumites here that can THINK. As for the village idiots ... they will soon hang themselves. Oh what a tragedy.

 

[SANDY]

Quote from Property below-

I am a firm believer in matched pairs .. just harder to do among smaller properties in my opinion and I achieve the exact same thing with my adjustment process as one would splitting the hairs to make individual adjustments. I would bet, given the data, the adjustments would nearly be equal in the end given good analysis.

Thanks for your posts.[/quote]

Then do the matched pairs analysis in you believe in it and stop being so lazy. You might also want to review posts #5,9,12,13,20,21.