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income from tower rental--where to include it--if at all

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Anonymous

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Hi All--

Doing a SFH on 9 acres, (5 acres excess), with a right of way to a radio tower that brings in $100/month--been the same rent since 1958--

Question--where does this go on the FHA form? Is rental income from land use permitted for a FHA loan?

house not in fall zone (by 25-30' I estiamte).

I don't think this one is going anywhere as 1/2 the basement has 2" of water in it, inoperable sump pump, and in another section of the basement, where the water dries leaves a hard crust like some kind of chemical precipitated out.

Moreover, there is a dug well that shares the water duties with a more recent drilled well. (dug well came back after the drought ended). Nothing's easy. If it was, ANYBODY could do this stuff. Have a good week, all!!
 

AC King

Sophomore Member
Joined
Jan 20, 2002
Frank,

One question you may consider is, would a prospective buyer consider the income significant enough to encourage the purchase of the property? It does not appear from your post that the $100 right-of-way fee would significantly impact the property. If not, then an income approach to value would not be required by FHA because the motivations of the buyer and the marketability of the property are not based on its income-producing potential. You may wish only to mention the income as ancillary to the residential use of the property with no significant inpact on value or marketability. I would note it on the first page under comments concerning the subject.


Another consideration to ponder is, in your market area will the existance of such a structure adversely affect the value of the overall property and limit the intended use by a purchaser? It will probably be difficult to find similar properties with the same influence in the subject's marketing area and therefore difficult to support an adjustment either positively or negatively.

You posed a very good question and should it elicit several varied opinions.
 

Larry Lyke

Senior Member
Joined
Feb 2, 2002
Frank --

I don't see any particular problems that can't be remedied by the UW.

Right of way income to Tower: Put mention of it under Legal and indicate the amount of income. UW will obtain a letter from Tower's owner, perhaps. Also, UW will see the easement when the title work comes in.

Yes, the UW can use the income for the Borrower if it's ongoing for a period certain. Sounds as if it might be in perpetuity.

I'd like to meet the guy who contracted for that $100/month payment back in 1958 forever. In today's world, you could almost guess it ought to be $500+, huh? Having said that, of course, I don't know if the Tower people built the road or did something else for the then-Owner.

Anyways, also mention the Tower in the VC Sheets in order to disentangle the Tower from its legal and income blurb in the URAR part of the report.

The water in the Basement and "chemical residue" may or may not be issues that can be resolved, BUT give it a try by filling out the VC Sheets carefully as you see the issue and let the UW figure it out. Write your VCs as fact without incorporating ANY opinion or leaning-DIRECTION as long as you do not know what's going on for sure.

A bad well or sharing situation doesn't have to be insurmountable. Sounds llike it might be something the Seller would have to contend with in any case no matter how sold -- FHA just being a bit more annoying is all.

Lucky you to get this learning experience.

Don't forget to come back and let us know how it all turned out! That's if you don't get too badly beat up!
 

Ben Vukicevich SRA

Senior Member
Joined
Feb 9, 2002
Professional Status
Certified General Appraiser
State
New Jersey
Frank

You mentioned 9 acres (5 acres excess). Are you stating that the subject has excess land subject to subdivision? If the subdivision is feasible, then you can not value the excess land as per 4150.2.

I would require the site to be subdivided and hopefully the tower will be on the new subdivided site, thus solving your tower income problems.

Ben
 
A

Anonymous

Thread Starter
Guest
The tower is on the rear 5 acres that I consider excess. It would not be used for home construction as most of it is in the fall zone of the tower.

Motorola was the lessor, but I could not find a copy of the lease in the courthouse, yet I did trace it back to '58 with the stipulation in the deed that the lease conveyed with the land.

I will address these issues in the vc forms, and my pics of the home show the tower clearly in the background.

will advise on outcone. it'll be a while--they can't find the FHA
case number for me. so it goes.
 
A

Anonymous

Thread Starter
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<<It would not be used for home construction as most of it is in the fall zone of the tower. >>


I once appraised a house , new construction, being built under a tower and the State Police, who owned the tower, gave them permission. The house actually lay between the tower and a guy wire. I would not have lived there for love nor money. I discounted it a bunch.
[/quote]
 
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