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Help on older home!!

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Travis McGee

Senior Member
Joined
Sep 18, 2004
My subject is a 2500 SqFt, 93 year-old home in an urban area. The home is an investment property that has 8 bedrooms being rented by the week. Two bedrooms have kitchens, the other six share a kitchen that is downstairs. One bedroom has his own bath but is it not one that has a kitchen. For small residential income properties, legally I can do up to four units on one lot. In your opinion, is this one unit, six units, eight units, etc.?? Can I put this on a small residential income form?

Any input is appreciated!!

Shane Self
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
What you have is a mess! Generally speaking...rooming houses don't qualify for typical residential loans. Sure sounds like an assignment I would turn down. Good luck.
 

Ted Martin

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Kansas
What you have is not a house but a boarding house or rooming house. They are a pain in the neck. You will need to check the zoning and land use, find other rooming houses to develope you income approach, and do in as a narrative rather than put it on a form. Also don't forget to triple or more your standard fee for a fourplex.
 
Joined
Jan 16, 2002
We call them SRO's (single room occupancy), like others already said this is a real mess and pain in the neck, and probably not worth the aggrevation, especially if your client is a regular lender expecting report to be done on forms. Fannie/Freddie forms won't work, needs a narrative. Is client is conventional lender type ? If so, call them and explain what the problem is, plus big fee required.

Good luck.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Joe:

It depends...

In many markets the income approach may assume narrative proportions... but if the most probable BUYER is someone returning the thing to SFD, then the market may indicate another direction, and a form report may be perfectly appropriate.... You can cram one of these ON a form anyway, It HAS been done :wink:

The fact that you COULD turn a neighboring property into a similar use, would not neccesarily occur to you or me if we did not know that the one next door was a SRO! 8O I mean I do not go through neighborhoods of SFD's of appropriate size ASSuming SRO use when I do a SF appraisal!

Highest and Best Use on one of these SRO's does require a property manager with the patience of a saint! Saints are in short supply here on planet Earth, so realistic H&BU may be return to Single Family Occupancy :idea: .

I have performed (what I assume was) perfectly USPAP compliant appraisals of this type of property... using {gasp} FORMS!

It helps a LOT to have comps...

We are in perfect agreement that Fee Adjustment is required!!


Eidited to provide clarity:
Note for the record: I DID discuss the assignment with MY state board before/err make that DURING the assignment (after I figured out hwat I had gotten into :roll: ... and had a certified General look it over before I turned it in, just for insurance :wink:
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
I have seen these things rented by the person to illegals. They will squeeze as many in as there is floor space to lie on. I saw a house next to one of these catch on fire and began to threaten the rental unit. It was like you kicked an anthill the way they poured of that house. They're very lucrative but appraising them is tough, especially getting income data.

Roger
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Personally, I wouldn't do it and would refer it to a commercial appraiser.

Whatever you do, make absolutely sure you DO explain exactly what it really is - no matter what any LO tells you!!!

It is what it is and that's what it should be appraised as. Double check for zoning!
 

Mike Simpson

Senior Member
Joined
Jan 30, 2002
I agree with Mike Garrett.

Basically, it's a dorm. I had one of these a couple years ago...called the client and told them I wasn't qualified (didn't want the migraine!)

-Mike
 

Rlong

Senior Member
Joined
Jan 31, 2002
Professional Status
Certified General Appraiser
State
Colorado
I did one as a "boarding house" last year. Similar setup approximately rooms, one kitches etc. It was ordered as a narrative commercial report. $2,500 fee?, maby $2,000 and it WAS still a pain, your right.

Bob in CO
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
You don't see rooming houses much anymore although during the early part of the last century they were a fairly common place for single people to live.

I just finished the completetion certification on one that was a major renovation job for about 20 months back to a single family house on a very fine street in Charlevoix. The remodeling work had been started when I got the assignment so I did it as a single family house "subject to" finishing.

Unless it is going to be used as a single family house, I would not even attempt to start this kind of an assignment. And then there would be functional for all of those extra kitchens etc.

Pass on this one would be my advice.
 
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