Anyone care to educate me on developing the As-Is value mid new construction?

[Surf Cat]

I would sum the land value, and assemblies from cost books or the builders estimate of completion and call it good.

They are condos though. The land might be shared between both units...

 

[Elliott]

So let's say you appraise the house and land for $400,000 when it is finished. Let's say the house is currently 60% complete, then its as is is $240,000.

 

[Dublin ohio]

So let's say you appraise the house and land for $400,000 when it is finished. Let's say the house is currently 60% complete, then its as is is $240,000.

If only it was that easy

 

[George Hatch]

All RE is local but you can look for actual sales of partial construction. They'll often be REO resales. You can extract investor profit margins off of the heavy fixers and remodel/flips. A contractor will approach this as a cost analysis, looking for the hard costs to cure.

The rule of thumb for the total discount from as-completed which has worked in this region is costs x 2. If an investor or contractor has to spend $150k to finish then they can't pay much more than [As complete - $300k = acquisition cost). Nobody works for free so the discount has to consider:

hard costs of material + labor at the retail rate​

Fees and permits and any outstanding fines​

Financing or opportunity costs​

Holding costs such as property taxes and insurance​

Contingencies (the unknown X factor)​

Any anticipated changes in the overall market conditions over the length of time to complete​

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Also, if an unenclosed building has been exposed to the elements for longer than just a couple months that can damage existing components