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Duplex vs Triplex

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Lanny A Freng

Sophomore Member
Joined
Nov 28, 2006
Professional Status
Certified Residential Appraiser
State
Minnesota
I did an appraisal on a duplex. They did a review on it because it was a non armslength transaction because the guy buying it was a realtor. Anyway. The reviewer disagreed with me and said it was a Triplex. In my opinion the third "unit" he is counting consisit of a hallway converted into a kitchenette, it has a 2 foot long section of countertop with a small sink in it. There is a gas hookup for some sort of Ice house stove or something tiny. There is no room for a fridge. Keep in mind this area is about 3.5 ft wide x maybe 7 to 8 ft. Off of this there is a bedroom and a 3/4 bath off it. Am I wrong? If my memory serves me you had to access this "unit" through the other main floor unit. I guess it maybe possible that the hall could of been closed of by interior doors but how secure is that? I am going to go back out and verify with new pictures this afternoon but just cuious on others thoughts.
 

Mztk1

Senior Member
Joined
Dec 3, 2006
Professional Status
Certified Residential Appraiser
State
Florida
If it can be legally rented and someone is willing to pay rent on it, my gut says it is a unit.
 

Lanny A Freng

Sophomore Member
Joined
Nov 28, 2006
Professional Status
Certified Residential Appraiser
State
Minnesota
wouldnt you need an independant entrance to classify it as a unit?
 

Rufus

Junior Member
Joined
Apr 3, 2008
Professional Status
Licensed Appraiser
State
Indiana
How about zoning? Is a triplex legally permissible?
 

CURT VAN HOOSER

Senior Member
Joined
Nov 3, 2003
Professional Status
Licensed Appraiser
State
California
Do you have to walk through someone elses residence to gain access to the "unit" or is it accessed off a common foyer of some sort? You must have done the appraisal quite some time ago to have forgotten. Also, when you did the op income, were you provided with evidence of three three rents?
 

Lanny A Freng

Sophomore Member
Joined
Nov 28, 2006
Professional Status
Certified Residential Appraiser
State
Minnesota
yeah you had to walk inbetween units A's bedroom and it's foyer to access "so called unit b"s entrance. No evidence of three rents. Current listing stated it as a 2 unit so did the last sale from 3 years ago
 

Lanny A Freng

Sophomore Member
Joined
Nov 28, 2006
Professional Status
Certified Residential Appraiser
State
Minnesota
yeah but I dont have interior walls sketched on it. The new one will this afternoon to show em the set up.
 

KD247

Senior Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
You're going to find a thousand different rules for defining a "unit."

When in doubt, since we're in the business of estimating market reaction, I'd go with how the market perceives the property. In all likelihood, the market is going to see this as a hallway with a sink, not as a third unit.

It doesn't cost much to put a sink in a hallway, and it shouldn't cost much to remove the sink, so there's probably no significant effect on value. But, the client should be clearly warned that there may be health and safety issues as well as possible building code and zoning violations.

You're not going to be able to change the reviewer's mind, so I'd probably just type an addendum explaining why some would see this a three units and some would see it as two, but that in the long run it competes with other duplexes, not triplexes.
 

PJK03

Sophomore Member
Joined
Mar 4, 2007
Professional Status
Licensed Appraiser
State
California
You're going to find a thousand different rules for defining a "unit."

When in doubt, since we're in the business of estimating market reaction, I'd go with how the market perceives the property. In all likelihood, the market is going to see this as a hallway with a sink, not as a third unit.

It doesn't cost much to put a sink in a hallway, and it shouldn't cost much to remove the sink, so there's probably no significant effect on value. But, the client should be clearly warned that there may be health and safety issues as well as possible building code and zoning violations.

You're not going to be able to change the reviewer's mind, so I'd probably just type an addendum explaining why some would see this a three units and some would see it as two, but that in the long run it competes with other duplexes, not triplexes.


I like this response. I, too, find that just explaining, and not fighting, to the UW usually generates positive results. Now, I wish I had an order like this, all I have been getting is SFR's and mostly REO's at that.
 
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