Entrepreneurial Profit

[Seahead]

I would like them to point out were in USPAP does it state that entrepreneurial profit must be taken. Entrepreneurial Profit is a hypothetical estimated cost of what a developer and/or owner would require as a return for assuming the financial risk associated with a new development. The riskier the development the greater EP generally is required.

 

[Lost Cause]

I would like them to point out were in USPAP does it state that entrepreneurial profit must be taken.

When it comes to application of methods, USPA is famously non-specific. But as was pointed out above, one could make a reasonable argument that USPAP does require it:

Standards Rule 1-1 (a) states that "In developing a real property appraisal, an appraiser must ... employ those recognized methods and techniques that are necessary to produce a credible appraisal."

If one agrees that including EI is a recognized technique necessary for a credible appraisal, one could well argue that SR 1-1(a) does require the use of EI.