Lending team wants to know if H&B use is residential or not

[gregb]

If one treats the comps the same way as the subject in terms of total rooms, its apples to apples.

 

[George Hatch]

Total room count sometimes seems subjective to me. Or subject to interpretation.
Is it a dining room or area? How big does it have to be to be a bedroom.

Not subjective at all. Think about how units are marketed. They're not marketed by GLA; it's always by bedrooms. I've seen appraisers use price/bedroom and it does work in some market segments. But not all. The rents for a 2bd are seldom actually double what they are for the 1bd.

Will someone pay 20% more for the 2bd unit that's 1000sf than the one that's the same but is only 800sf? Not usually.

 

[Tim The Enchanter]

If one treats the comps the same way as the subject in terms of total rooms, its apples to apples.

So now I have to consider the H&B use of Granny Smith vs Red Delicious Vs ....?
Yes. Good point.

 

[Tim The Enchanter]

The rents for a 2bd are seldom actually double what they are for the 1bd.

True.

Maybe it would make more sense if I said it is not always clear what actually exists.
Between the clear as mud MLS listings and discrepancies with Realist data. Not too mention what I see when I drive by.

 

[George Hatch]

What's cool about this thread is that its the kind of discussion that would be next to impossible to have with a raw recruit who lacks any experience. The only reason it makes sense is because you've already been seeing variations of it in your work. That means that we can explain it in terms of being a parallel rather than as "new" material. Moreover, you're not only going to see this in terms of the different property type or appraisal situation, but you'll also be seeing it in these terms in your SFR work.

This is an example of why I don't believe in the all-college approach to licensing.

 

[Tim The Enchanter]

You can't possibly know what you are doing from classes and books alone. You need a significant amount of field, research, and analysis experience in the real world. So plus one on your sidetrack, George.

I think it's good I can come hear and get my thoughts sorted out on this oddity.
See what my peers think. The disparate unit sizes is probably not ideal either.

 

[glenn walker]

So many of these issues are Market and State Specific .

 

[MMing5000]

I saw a duplex last month consisting of 1 house of about 2400 SF and another of 500 SF. The larger one is over 100 years old and needs "everything". Roof electric plumbing HVAC windows and more. The small one is slightly better. I advised the client and they have been sitting on it. Now they as what the fee would be to do an H&B use analysis to determine if it is residential, or not. Zoning RD1.5-XL allows at least 5 units, maybe more with incentives. The laws are ridiculously complex. If it was in better shape I don't think I'd have much question. But as is maybe it would be better to tear down.

H&B use is residential with the zoning. How many units is another question and one I don't have experience or training with. I suspect that is what they really want to know. I'm thinking to tell them so and ask again to cancel this mess. It was previously listed as a development opportunity but did not sell. It is in Hollywood and there is a lot of redevelopment going on there. Ugh.

i am surprised the Lender did not ask you to estimate the estimated cost to cure to bring the C5/C6 to C4 condition since they would usually to loans on the existing improvements rather than to a new construction loan which would be more costly to the Borrower and possibly tougher to qualify as well.

 

[ZZGAMAZZ]

I think not, but the zoning would be different too. You need to compare comps with same zoning as much as possible.

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Can a Residential Cert conduct an assignment when one of the possible uses is a 5-unit apartment improvement?

 

[KONA]

Highest and Best Use !!!!!