Loft Condominium - Residential Condo Or Commercial Mixed-use Property?

[J Grant]

what a mess ! No wonder you are having doubts...but it sounds like the present owner is using it as an air BNB type revenue source...which may not be how a typical buyer would use it and the building is not set up as a condo-tel. Who does own it now?

You mention there are a number of loft style comp sales, are they rented by the night, or sold to buyers for occupant use or if investor buyer for annual rental income expectation?

 

[George Hatch]

Current occupancy doesn't necessarily speak to how the property would be marketed and sold or how it would be used by the typical buyer.

Just because an SFR gets used in a vacation rental operation by a particular owner doesn't make it a hotel.

 

[J Grant]

Current occupancy doesn't necessarily speak to how the property would be marketed and sold or how it would be used by the typical buyer.

Just because an SFR gets used in a vacation rental operation by a particular owner doesn't make it a hotel.

Exactly. Look at how often we appraise vacant properties. Which does not mean the next buyer intends to keep it vacant.

 

[George Hatch]

As for live-work lofts that are actually lofts if people are buying them to live in them that's not any different than buying a rural home with a workshop or an ag use on zoning that doesn't prohibit a business there.

 

[leasedfee]

The second level residential unit is currently managed by a property management firm who rents it as a nightly rental for $280 per night, and it is usually full.

That includes intangible business value and is a going concern even as a single unit, e.g., AirBnB or like "executive offices."

A general principle: You have a separate value for each legal parcel as they are independent of each other. They are fungible, and merchantable as individual pieces of real property, each having the full bundle of rights. The one big exception is a multi-unit bulk property which are bought and sold wholesale by its own market segment of buyers and sellers. Examples would be a subdivision portfolio -- and you see one deed with numerous units as opposed to 60 deeds -- or a large SFR/condo investment portfolio. You want to get a copy of the title commitment and condominium plat and docs. I'd bet a nickle that those subdivision documents set forth an HOA but for a 2 unit building, they're like geesh why bother with the formal paperwork.