Duplex vs SFR

[kjk]

Hi all! TIA for all the help. This forum has been a lifesaver for a newer appraiser, such as mysef.

I have an odd subject I'd love to hear opinions on.

My subject is a 1900 build, originally built as a single-family home. It was converted to an up/down style duplex in the '60s but hasn't been rented in 20 years. The city records it as a duplex. Zoning allows SFR and two-family. It has been owner-occupied with the owner using both units since then (there is an interior staircase leading to the upper level). There is only one elec. meter and one set of mechanicals (not typical for mfr in my area). The home is also in terrible condition. The owner is 90 years old, didn't have any working appliances, and finally asked his neighbors for help after his forced air furnace and water heater went out. Definitely C5 as it is liveable but the mechanicals are nearing the end of their useful life.

The appraisal is for non-lending purposes. The VA is requiring the owner to get an appraisal and wants it sold for at least the appraised value- with the proceeds going to the VA to pay off a reverse mortgage.

Considering the lack of utilities, small size, and need for both mfr/SFR in the neighborhood, my opinion of the highest and best use is single-family. At this time I plan to use the single-family GPAR.

As I said, I am a newbie (6yrs in the biz) and I haven't run into this type of situation before. Again, thanks for any guidance you have to give!

 

[George Hatch]

Either way, a buyer will need to spend money to make it habitable. Depending on the market conditions in your area the typical buyer might be a contractor/investor type looking to rehab/flip.

Is it's "as repaired" value worth more as an SFR or worth more as a 2-unit?

 

[kjk]

Either way, a buyer will need to spend money to make it habitable. Depending on the market conditions in your area the typical buyer might be a contractor/investor type looking to rehab/flip.

Is it's "as repaired" value worth more as an SFR or worth more as a 2-unit?

There are no comps for it as a duplex. GLA of 1300 SF- one bed on the main and a studio unit on the upper level. There just isn't a demand for this. As-repaired, I would still say SFR.

 

[Dublin ohio]

Not sure it makes a difference. But if you can you might want to find out how it was appraised for the reverse mortgage

 

[kjk]

Not sure it makes a difference. But if you can you might want to find out how it was appraised for the reverse mortgage

Not sure it makes a difference. But if you can you might want to find out how it was appraised for the reverse mortgage

I did consider this! However, I have seen too many objectively terrible appraisals to rely on someone else's opinion of H&BU!

 

[glenn walker]

Hi all! TIA for all the help. This forum has been a lifesaver for a newer appraiser, such as mysef.

I have an odd subject I'd love to hear opinions on.

My subject is a 1900 build, originally built as a single-family home. It was converted to an up/down style duplex in the '60s but hasn't been rented in 20 years. The city records it as a duplex. Zoning allows SFR and two-family. It has been owner-occupied with the owner using both units since then (there is an interior staircase leading to the upper level). There is only one elec. meter and one set of mechanicals (not typical for mfr in my area). The home is also in terrible condition. The owner is 90 years old, didn't have any working appliances, and finally asked his neighbors for help after his forced air furnace and water heater went out. Definitely C5 as it is liveable but the mechanicals are nearing the end of their useful life.

The appraisal is for non-lending purposes. The VA is requiring the owner to get an appraisal and wants it sold for at least the appraised value- with the proceeds going to the VA to pay off a reverse mortgage.

Considering the lack of utilities, small size, and need for both mfr/SFR in the neighborhood, my opinion of the highest and best use is single-family. At this time I plan to use the single-family GPAR.

As I said, I am a newbie (6yrs in the biz) and I haven't run into this type of situation before. Again, thanks for any guidance you have to give!

For VA liquidation on a reverse its either in default or the owner died or is now in a nursing home or long term care . You are are not appraising it for a proposed highest and best us as that not the assignment condition and VA will have to list and sell it for what it is not what it could be.

 

[Dublin ohio]

I did consider this! However, I have seen too many objectively terrible appraisals to rely on someone else's opinion of H&BU!

Wasn't inferring that what so ever. Just never hurts to know what possible kick back is out there.

 

[glenn walker]

Wasn't inferring that what so ever. Just never hurts to know what possible kick back is out there

We dont appraise -VA-FHA -GSE or their potential REO Properties for higher and better uses.
We only report if there is a potential higher and better use. The Assignment conditions are what directs us not hypothetical what ifs. This is even more critical on REO -Reverse Mortgage defaults etc as who is going to bring this property up to its higher and best use ? The VA will list it and sell it as fast as they can unless a family member can take up the loan deficit and purchase it from the VA .or lender servicing it.

 

[kjk]

For VA liquidation on a reverse its either in default or the owner died or is now in a nursing home or long term care . You are are not appraising it for a proposed highest and best us as that not the assignment condition and VA will have to list and sell it for what it is not what it could be.

Thank you for your input! The owner is now in a nursing home. I will appraise it as a duplex. This will be a fun one!! Thanks!

 

[kjk]

We dont appraise -VA-FHA -GSE or their potential REO Properties for higher and better uses.
We only report if there is a potential higher and better use. The Assignment conditions are what directs us not hypothetical what ifs. This is even more critical on REO -Reverse Mortgage defaults etc as who is going to bring this property up to its higher and best use ? The VA will list it and sell it as fast as they can unless a family member can take up the loan deficit and purchase it from the VA .or lender servicing it.

THANK YOU! This is great to know.