Income Approach?

[J Grant]

thanks ! (sort of a back handed compliment but I'll take it!

 

[Michigan CG]

But you just said leased fee equals fee simple.

Ok. That’s super common. Doesn’t mean they mean the same thing. Price and value match 99% of the time. Doesn’t mean they are the same.

Actually I did not say that. Leased Fee = Fee Simple when rents are market is what I said. If price = value then one would conclude that they are the same just like Rent (price) = Market Rent (value).

Think about that for awhile.

 

[J Grant]

for Addie, an analogy

You buy a car - you own the car equivalent of fee simple in RE. If an appraiser is valuing the car, they might value the car at 20k.

You decide to rent your car to a friend for $300 a week. You still own ( fee simple) the car, but exchange right to drive it for the benefit of collecting rent. $. If appraiser were to value the leased fee interest of car it would be $300 a week (rental rate for an income approach)

Instead of buying the car, you leased the car from dealer for $2000 a year for 3 years. If an appraiser were to value the lease (a version of leasehold in RE), it would be the 3 year lease is worth $6000.

 

[Addie]

Concede.

 

[Addie]

Concede.

I will do leased fee dwellings like I do H&B use.

Just check the box. Zero summary.

Fee simple. Check box.

Tenant. Check box.

H&B use. Check box.

Yawn.

Next.

 

[Addie]

Notice how very limited ppl have chimed in. It’s because they never actually thought for themselves. They were trained. And trained wrong.

A lease on a property ( in CA, lets say) is fee simple? Ok. Keep training Appraisers that way.

“Hey, see this box, just check it.” Hey, see this box called stable “just check it”

FNMA kinda called you all out on that. (a while ago) She said, no thank you, we got it from here. Mkt been ramping up 20% and you all say stable? To not offend your Goddess?

You all brought the MC form on cause you never did market conditions, and you made it go away cause you never did market condituons.

You.

You.

 

[gregb]

Write several life-estate, leasehold, leased-fee and partial interest narrative appraisals, then get back to us. Some posters on the forum are either not trainable or immune to guidance with an ostrich way of life. No worries, my 20 year old daughter knows everything, until she doesn't.

 

[Addie]

fully agree

 

[Addie]

Write several life-estate, leasehold, leased-fee and partial interest narrative appraisals, then get back to us. Some posters on the forum are either not trainable or immune to guidance with an ostrich way of life. No worries, my 20 year old daughter knows everything, until she doesn't.

Your house is leased for 1 month. Appraiser values it at that days value. They said it was fee simple as of that day. Is this correct?

 

[Michigan CG]

Addie, have you ever written a narrative report?