Extraction Method

[WestMichiganCG]

Tear downs of extremely old buildings in the city are helpful. There are a number of buildings I remember researching near the 150 year mark where they were worth about $10/sf for the shell. It was fairly consistent and made it easy to determine land value. It's a bit of an art but supportable. Other ways I've utilized for vacant land value was to go back a few years, widen the search parameter. I'm with George on the discussions with contractors. They will work without entrepreneurial profit to keep their workers busy. If they make zero profit and everyone gets paid, they are fine with that. Laying off crews is its own set of problems. I also agree with A K, plenty of personal residences and especially cottages get constructed without a care in the world to resale value. Wealthy people who knock down a $1 million lakefront home to construct a $2 million lakefront home that is worth $2.5 million. They don't care, they built it to enjoy it. If we're talking about a developer doing that as a spec house, that guy is not going to be in business long.

 

[Terrel L. Shields]

In my world, permits, septic, utilities will run about $2,000-$3,000. A driveway $3/SF concrete, gravel 50¢/SF, only in town do they put any turf down, just seed, rake and roll. Fencing, depends upon what and how much.

 

[RCA]

Obviously the incentive is personal enjoyment of a new home. It is not a financial incentive as it is with developers.

I have to say that only a appraiser that has never done an appraisal in a real city could say extraction is useless. Maybe in your land of suburbia you can say extraction is useless.

Tear downs are the best indicators of site value. #2 is vacant land sales. After that there is no other option than extraction. Allocation to me is useless.

A "Tear Down" is a land sale. Right? Maybe you just don't know how to find land sales.

 

[WestMichiganCG]

A "Tear Down" is a land sale. Right? Maybe you just don't know how to find land sales.

There is still demolition cost. I know of a tear down that was more expensive than the value of the land so it sat for decades before it was redeveloped.

 

[RCA]

Tear downs of extremely old buildings in the city are helpful. There are a number of buildings I remember researching near the 150 year mark where they were worth about $10/sf for the shell. It was fairly consistent and made it easy to determine land value. It's a bit of an art but supportable. Other ways I've utilized for vacant land value was to go back a few years, widen the search parameter. I'm with George on the discussions with contractors. They will work without entrepreneurial profit to keep their workers busy. If they make zero profit and everyone gets paid, they are fine with that. Laying off crews is its own set of problems. I also agree with A K, plenty of personal residences and especially cottages get constructed without a care in the world to resale value. Wealthy people who knock down a $1 million lakefront home to construct a $2 million lakefront home that is worth $2.5 million. They don't care, they built it to enjoy it. If we're talking about a developer doing that as a spec house, that guy is not going to be in business long.

Ummmm.. Most appraisers are totally focused on "Market Value" which has absolutely everything to do with resale value. So, what in the world are you talking about? To me this is all utter nonsense. "...plenty of personal residences and especially cottages get constructed without a care in the world to resale value...". Maybe you woke up on the wrong side this morning.

 

[WestMichiganCG]

Ummmm.. Most appraisers are totally focused on "Market Value" which has absolutely everything to do with resale value. So, what in the world are you talking about? To me this is all utter nonsense. "...plenty of personal residences and especially cottages get constructed without a care in the world to resale value...". Maybe you woke up on the wrong side this morning.

I was responding to a number of different threads and the comments were in response valuating land with tear down and shell data, how contractors can work without entrepreneurial profit and how individuals spend more than the resale value on certain types of properties. It wasn't meant as a personal attack if that's what you're implying.

 

[RCA]

I was responding to a number of different threads and the comments were in response valuating land with tear down and shell data, how contractors can work without entrepreneurial profit and how individuals spend more than the resale value on certain types of properties. It wasn't meant as a personal attack if that's what you're implying.

No, of course not. I'm having a hard time figuring out what exactly people are talking about at times.

Like today the head surfer notifies me I'm about to kicked off for mentioning Trump in a post.

I do a search of "Trump" and then "Biden". For each I find 100+ posts for the past week. So, I'm beginning to feel this forum has a hidden language all it's own.

 

[Tim The Enchanter]

This is not about dentistry.
Nevermind.

 

[George Hatch]

Going back to tear-downs; one attribute they can provide is an interim rent while the developers get their plans and permits and financing together, so those rents can help offset the holding costs and demo costs.

I'm running into a number of sales of existing commercial structures in L.A. which are being purchased for their respective land value. The subject of one of my assignments this week was worth just as much as land as in its existing use. In that maintaining an existing use poses a zero risk of loss to a property owner the existing use is still the nominal "HBU as improved" but the REL of the structure (which is in average and serviceable condition for its market segment) is at or approaching zero.

 

[RCA]

Going back to tear-downs; one attribute they can provide is an interim rent while the developers get their plans and permits and financing together, so those rents can help offset the holding costs and demo costs.

I'm running into a number of sales of existing commercial structures in L.A. which are being purchased for their respective land value. The subject of one of my assignments this week was worth just as much as land as in its existing use. In that maintaining an existing use poses a zero risk of loss to a property owner the existing use is still the nominal "HBU as improved" but the REL of the structure (which is in average and serviceable condition for its market segment) is at or approaching zero.

Construction appraisals, all the endless boring details. Then there are the reviewers who dogmatically believe that everything has to be done in one and only one way. .. Just a comment.