Do I HAVE to use the 1025?

[John Hassler]

Just do a narrative!

Your H&BU analysis (the use which is: legally allowable; physically possible; has demand in the marketplace; and results in the maximum market value) will point you in the correct direction. Depending on the SOW a form may be adequate. I don't see what the reviewer could "tag" you for if you explain your H&BU analysis.

 

[Mike Kennedy]

Sounds like......

The owner lives in the smaller unit and his mother lives in the slightly larger unit.

GRM's for two attached units are 175 to 205. The higher GRM is for nicer, newer two units with garages in a somewhat better negibhorhood. The subject property could command rental rates of about $1350. By the income approach the value would be $268,000 +- ($1,350 x 195)

But if you use similar size, older cottages with granny units, the value is more like $325,000+ I'm thinking H&BU is an owner occupied SFR with an accessory dwelling unit rather than a straight out investor type income property.

Greg - assuming the R2 Zone also permits owner-occ with "inlaw/granny" units -think you answered your own question. ......straight investor rental under 300k ..........H&B owner-occ / granny $325k .......

(that also assumes 2fam sale comps support under $325 prices)

 

[Mike Boyd]

Maybe I missed something in your original post. Did you say that there were comps for whichever direction you take it?

If it were me, I would use the 1004 with a granny. However, you obviously need the practice on the new 1025 and the lender seems pretty flexible. Don't be lazy, I betcha the extra $$$ would come in handy.

 

[Rudy Canoza]

probably a converted garage

Hummmmmm...

I assume it's conforming, typical for the neighborhood, and marketable in its current configuration.

I assume you're not a contractor and can't guarantee the construction quality, quality of materials used, or if it is built (converted) to code.

I assume you checked with the borrower's insurance agent to see how it is insured.

And, I assume your gut tells you it's an SFR with an accessory unit.

/Go with your gut...

 

[Chris Colston]

1004 seems the better way to go

I'm on the team with the 1004 option.

I just finished a report with 2 houses on 12 acres. One house was 4,200 sf the other 2,800 sf. Each had their own meters (used to be 2 single family houses on 6 acres a piece that were combined about 5 years ago). I wanted to do a narrative, but the client insisted on a form. I used the 1004...with a very large addendum.