Condo with a permitted ADU

[Willis]

Trying to figure out the best way to determine fair market value of a condominium with a permitted ADU. The project consists of 2 units, the HOA has been dissolved ( no fees) and no CC&Rs are to be found. The subject owner (unit A) obtained approval from the other owner (unit B) and the city of Glendale and built a 1,000 sf, 2 bed, 2 bath ADU on the lower level or "crawl space" of the hillside condo. I expanded search criteria way back and way far, Absolutely nothing similar. I know the cost to build the ADU and can estimate the value of the condo by itself.

My question is: Would it be reasonable to utilize SFRs to estimate the contributory value of a similar ADU (as a percentage), do an across the board adjustment and explain methodology and lack of comps?

Has anyone else even heard a condo with an ADU?

Any advise is greatly appreciated.

 

[Terrel L. Shields]

Has anyone else even heard a condo with an ADU?

No. And if for secondary market, I would decline the assignment and let someone else fall on their sword. I hope you are getting a double fee because it is going to be more than double work and then a ton of stips to follow if not a simple in-house lender ordering direct.

 

[J Grant]

Trying to figure out the best way to determine fair market value of a condominium with a permitted ADU. The project consists of 2 units, the HOA has been dissolved ( no fees) and no CC&Rs are to be found. The subject owner (unit A) obtained approval from the other owner (unit B) and the city of Glendale and built a 1,000 sf, 2 bed, 2 bath ADU on the lower level or "crawl space" of the hillside condo. I expanded search criteria way back and way far, Absolutely nothing similar. I know the cost to build the ADU and can estimate the value of the condo by itself.

My question is: Would it be reasonable to utilize SFRs to estimate the contributory value of a similar ADU (as a percentage), do an across the board adjustment and explain methodology and lack of comps?

Has anyone else even heard a condo with an ADU?

Any advise is greatly appreciated.

IF the HOA has been dissolved, is it still a condo?

I would find that out first. Sounds like a nightmare.

 

[Willis]

Yes, still a condo per city. And Yes, Nightmare.

 

[J Grant]

Yes, still a condo per city. And Yes, Nightmare.

The city can still have it recorded as a condo, but is there still an HOA, are there dues? if there are so few owners ( two?) could they dissolve teh condo?

I am at a loss for wrt how to appraise this - the city granted permission to build or finish the basement off as an ADU, but how does it function - as a separate unit that can be rented out? Who is the client - that might determine ( for me ) if I wanted to continue.

 

[Mike Ault]

Trying to figure out the best way to determine fair market value of a condominium with a permitted ADU. The project consists of 2 units, the HOA has been dissolved ( no fees) and no CC&Rs are to be found. The subject owner (unit A) obtained approval from the other owner (unit B) and the city of Glendale and built a 1,000 sf, 2 bed, 2 bath ADU on the lower level or "crawl space" of the hillside condo. I expanded search criteria way back and way far, Absolutely nothing similar. I know the cost to build the ADU and can estimate the value of the condo by itself.

My question is: Would it be reasonable to utilize SFRs to estimate the contributory value of a similar ADU (as a percentage), do an across the board adjustment and explain methodology and lack of comps?

Has anyone else even heard a condo with an ADU?

Any advise is greatly appreciated.

My advice would be to find similar ADU's which you can discern the value of to estimate the contributory value of your subject ADU. People in the market to rent those wouldn't spend too much time worrying about the form of ownership of the primary dwelling unit(s).

 

[Sadie]

I would use SFRs because that is all you will have. Do a market analysis to see what (or if) there is a market reaction to condo vs attached home. Then do that. And explain. Also double check to see if they are being taxed individually for the under lying land. There are condos here with no associations or dues. They are cheaper to build so there are builders who are building them as infill or middle housing.

 

[Willis]

The city can still have it recorded as a condo, but is there still an HOA, are there dues? if there are so few owners ( two?) could they dissolve teh condo?

I am at a loss for wrt how to appraise this - the city granted permission to build or finish the basement off as an ADU, but how does it function - as a separate unit that can be rented out? Who is the client - that might determine ( for me ) if I wanted to continue.

Separately metered and rented. I reached out to lender and received no guidance. Don't want to back out, I like a challenge but this is a tough one.

 

[Sadie]

Separately metered and rented. I reached out to lender and received no guidance. Don't want to back out, I like a challenge but this is a tough one.

I think you need to stap back and view it like a market participant. No HOA? No dues, it functions like an attached home. But it is still weired to have even an attached home with a basement apartment. Maybe look at new/newer construction. There are a few like that around here.

 

[J Grant]

Your comps can be a mix - such as two condos, one townhouse, two SF with an ADU ( for example).