Certified Residential.. can I do mixed use 51% residential How calculated

[cdanj]

I got a request for mixed youth Appraisal. In the request it says it’s 51% Residential. I’m looking at the photos and it looks like the first floor is commercial and the second floor is Residential.
It’s a bit of a drive, but I’m tempted to take it with the condition that if it is not 51% Residential I’m getting half the Appraisal amount as a trip fee.
But also I’ve just been avoiding these for the past several years.
I read somewhere the new rule is that the commercial space needs to be occupied by the owner.
But this one looks like a commercial space is vacant

 

[Artemis Fowl]

IMO.
With your cert. Don't.
While the assignment may be challenging, fun and you may feel capable of it...you open yourself to waaay too much liability. Partner with a Cert Gen if possible but don't try it alone. It's an opportunity if you can collaborate with someone and it goes well...it's a nightmare you'll wish you avoided otherwise.

 

[JTip]

No.
1-4 family, that's it.

 

[George Hatch]

Competency still applies. And regardless of property type, the benchmark for that competency will be based on what appraisers do who normally appraise such properties. Whether its a house or a condo or vacant land or religious or commercial or industrial. The measure of competency remains the same.

Mixed use can get real dicey if there is a lack of really comparable sales data. Starting with the point that the contributory value for two different uses onsite can be and often are unequal. You probably will have to run two separate rental surveys and possibly two different sets of comparables.

Now an SFR + salon in a converted garage is a much simpler appraisal problem and you can probably get away with appraising it like a house w/ feature. But the more complications that are involved the more complicated the analysis gets.

Let's say the subject is (3) units with 2 being residential and the other being a storefront or office or auto service. As a single property, the contributory value for the residential units will not be based on individual SFR or 2-4 sales, but rather the units from a 5+ multi-family property which will also not be eligible for 1-4 financing under residential terms. Same with the auto service or storefront unit; ideally you'll be looking for rental and sale indicators for multi-tenant properties of comparable overall size, not individual single tenant properties.

Mixing the incomes, mixing the different expense ratios and the different cap rates for these components. Unless you actually have enough mixed use sales data to stick to the single set of sales data.

I just got done with a mixed use (6 apt units+ storefront). I had to do 2 separate rent surveys. I had plenty of mixed use sales transactions in that area but I added a couple multi-family of comparable age and unit mix in order to demonstrate the similarities in value for each (which often doesn't happen that way in other areas).

If there are rent controls in place in your local that can REALLY complicate the analysis.

Whatever you do, don't use the salesprice itself as your unit of comparison (which is how SFR and 2-4s are analyzed) unless it actually is an SFR + addition type of situation. That's the mistake I almost always see SFR appraisers do when they appraise different property types that aren't marketed or analyzed that way by the market participants.

 

[swandel1]

Your CR license does not allow you to do HBU on anything commercial. I have stopped even doing SFRs located in commercial zoning as my state put the hammer down on a couple appraisers that got turned in via the review process, or so I have heard.

 

[Surf Cat]

Your description of what you're appraising is kind of vague. Maybe you can elaborate and give a better description.

For instance, I've appraised condominiums on Wilshire Boulevard in Los Angeles. The first couple of floors in the high rise were commercial, but I was appraising a condominium unit (condos made up 90% of the building). Do you have something like this going?

 

[George Hatch]

I'm picturing something like this:

 

[Surf Cat]

I'm picturing something like this:

View attachment 109743

If it's like this, the op should decline the assignment as a property such as this should be appraised as a whole rather than a portion. OP should review Fannie's mixed use guidance.

This assignment has to be from an AMC cheaping out and trying to bamboozle a residential appraiser for a signature to make the loan. SMH

 

[sputnam]

I got a request for mixed youth Appraisal. In the request it says it’s 51% Residential. I’m looking at the photos and it looks like the first floor is commercial and the second floor is Residential.
It’s a bit of a drive, but I’m tempted to take it with the condition that if it is not 51% Residential I’m getting half the Appraisal amount as a trip fee.
But also I’ve just been avoiding these for the past several years.
I read somewhere the new rule is that the commercial space needs to be occupied by the owner.
But this one looks like a commercial space is vacant

If you are here asking, you probably should either decline or find a Certified General Appraiser who will help you.

 

[ZZGAMAZZ]

Competency still applies. And regardless of property type, the benchmark for that competency will be based on what appraisers do who normally appraise such properties. Whether its a house or a condo or vacant land or religious or commercial or industrial. The measure of competency remains the same.

Mixed use can get real dicey if there is a lack of really comparable sales data. Starting with the point that the contributory value for two different uses onsite can be and often are unequal. You probably will have to run two separate rental surveys and possibly two different sets of comparables.

Now an SFR + salon in a converted garage is a much simpler appraisal problem and you can probably get away with appraising it like a house w/ feature. But the more complications that are involved the more complicated the analysis gets.

Let's say the subject is (3) units with 2 being residential and the other being a storefront or office or auto service. As a single property, the contributory value for the residential units will not be based on individual SFR or 2-4 sales, but rather the units from a 5+ multi-family property which will also not be eligible for 1-4 financing under residential terms. Same with the auto service or storefront unit; ideally you'll be looking for rental and sale indicators for multi-tenant properties of comparable overall size, not individual single tenant properties.

Mixing the incomes, mixing the different expense ratios and the different cap rates for these components. Unless you actually have enough mixed use sales data to stick to the single set of sales data.

I just got done with a mixed use (6 apt units+ storefront). I had to do 2 separate rent surveys. I had plenty of mixed use sales transactions in that area but I added a couple multi-family of comparable age and unit mix in order to demonstrate the similarities in value for each (which often doesn't happen that way in other areas).

If there are rent controls in place in your local that can REALLY complicate the analysis.

Whatever you do, don't use the salesprice itself as your unit of comparison (which is how SFR and 2-4s are analyzed) unless it actually is an SFR + addition type of situation. That's the mistake I almost always see SFR appraisers do when they appraise different property types that aren't marketed or analyzed that way by the market participants.

MR HATCH, Your comment about rental analysis reminded me to ask you about a current re-fi assignment of a 4000 sf SFR, 16000 sf lot, open channel lakefront property in Helendale. The Market Value opinion was challening but interesting....although I'm stuck on the rental analys because the largest SFR rental in the last 600 days was 2300 sf on a lot half as large [although lot size isn't a salient rental feature IMO]. I'm a firm believer that the selling price of a SFR pales in comparison to the significance of the adjusted value, but I'm unsure how to address a residential rental that is far above anything in the market, maybe ever, as I prepare to call local agents for theiir opinions..