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Discounting partial ownerships

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vargasteve

Junior Member
Joined
Jan 21, 2002
Professional Status
Certified Residential Appraiser
State
California
I know this is both a residential & commercial issue - in my case I'm a residential appraiser. BUT, those here will be more aware of this. I did post something similar in another thread but no helpful responses.


Appraisal Institute does have a course in which part of it covers discounting a partial ownership interest. However, they are not offering the class at this time. It's a dormant course.

I'm looking for a book or resource to help me determine in some cases with multiple heirs on residential real estate if / when discounting is worthy, and a resource to guide me in the process.

For example 10 residential properties worth X, with 4 heirs & equal shares. What is an individual share worth? I have a case like this with a $6.5 million porfolio value.

Any suggestions or resources?
 

Vernon Martin

Senior Member
Joined
Jun 8, 2005
Professional Status
Certified General Appraiser
State
California
I've heard that the ASA is more attuned to the appraisal of partial interests than the other professional associations, so you might check them out. In general, you need to make a deduction for lack of liquidity.
 

vargasteve

Junior Member
Joined
Jan 21, 2002
Professional Status
Certified Residential Appraiser
State
California
Thank you very much Vernon, I'll check that out.
 

Boonders

Junior Member
Joined
Oct 31, 2006
Professional Status
Certified General Appraiser
State
Iowa
Partnership Profiles has an extensive book and database for partial interest valuations. Typically considered the business valuation realm.

The AI has a class in Colorado and then another somewhere else this year on case studies in partial interest valuation. Its a follow up to the "dormant" course. Can't remember the guy's name that is teaching it, but i believe its the same guy that wrote the initial class. Look him up and I think he has a book or something too.
 

DWiley

Elite Member
Joined
Apr 4, 2007
Professional Status
Certified Residential Appraiser
State
Tennessee
We do partial interest appraisals of residential properties on a regular basis (for estate planners). Give me a shout and I will share some things that have worked for us.

DW
 

vargasteve

Junior Member
Joined
Jan 21, 2002
Professional Status
Certified Residential Appraiser
State
California
Thanks guys! I did check the ASA out, haven't found what I'm looking for there.

I'll call you DW

and thanks Howard & Dane - I will look this up.
 
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