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Looking for a sample condotel appraisal

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Brian Weaver

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Senior Member
Joined
Apr 16, 2005
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Illinois
Our board is trying to figure out if its too complex an assignment for a CR to do without a CG co-signer.
 

Tim Hicks (Texas)

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Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
Is a condotel a high rise condo with a hotel on the bottom floors and hotel service for the condos? We are getting a few of those around here, but I have never had to appraise one. I probably just jinxed myself.
 

David Wimpelberg

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Mar 30, 2005
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Certified General Appraiser
State
New York
Most states are fairly specific on the scope of practice is for non-generals. The main dividing line seems to be the development of Income Approach...not a GRM, which has extremely limited application, but direct cap, yield cap, DCF analysis, etc. I'm not familar with condotels, but if they are valued on an individual basis, and are typically valued by the Sales Comparison Approach or a GRM analysis, I don't think it would be outside the scope of practice of a CR.
 

Joyce Potts

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Supporting Member
Joined
Feb 6, 2005
Professional Status
Certified Residential Appraiser
State
Florida
Brian,

I can understand your concerns, but like anything else if the appraisers are honest, ethical and competent, I don't see any issues with it. A well prepared and supported Income Approach is probably the crux of any appraisal on a unit like that. The thing to look out for are the seasonal rentals, extraordinary costs, restrictions, etc. It's much like a short term rental property--but slightly more involved, IMO. If a cert general is involved, even better, however, many on this Forum will disagree.

But then have you EVER read a consensus on this Forum?
 

Marcia Langley

Senior Member
Joined
Aug 26, 2005
Professional Status
Certified Residential Appraiser
State
Missouri
Brian,

I've never looked at one but I'll be interested to hear how your board finally reasons it out.

I'd be concerned that the rental income would be more sensitive to the health of the overall project and a wider range of external factors than the unit value in a plain condo would be, making me lean more towards needing a CG.
 

Couch Potato

Elite Member
Joined
Mar 15, 2004
Professional Status
Certified Residential Appraiser
State
North Carolina
I agree with Joyce that they are very much like a short-term residential rental, but then I think those should be cosigned by a CG too. The typical residential appraiser lacks the skill to do a condotel, and most lack the knowledge needed to understand they don't know how to appraise them. An adequate job cannot be done without a knowledge of how to appraise a hotel, IMHO. They are a divided ownership interest in a hotel. Why would a residential appraiser not need a cosigner when appraising a hotel?
 

Brian Weaver

Thread Starter
Senior Member
Joined
Apr 16, 2005
Professional Status
Gvmt Agency, FNMA, HUD, VA etc.
State
Illinois
My opinion is that a condotel is just a condo with a timeshare element. I don't see anything particularly vexing about this that would require a CG signature. Some on our board see it differently. I really need to see a report to see what all the hubbub is about.

Some investors even accept a 1073.
 

William K

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Joined
Sep 21, 2007
Professional Status
Certified Residential Appraiser
State
Illinois
Brian,
Correct me if I am wrong but I believe in a CONDO/HOTEL isnt the primary use of the unit for income purposes, and are their not restrictions as to occupancy? I know I would not feel competant to perform an appraisal on said units ( as a Certified Residential Appraiser). When I looked into purchasing one out of state I was told that their are restrictions as they are basically for owners to have as an income stream, not really for personal use as a second home. I don't believe lending regs or requirements should play a part in this. FHA says an FHA approved appraiser can perform an appraisal on limited mixed use but we both know that it takes a Certified General to perfom that appraisal in Illinois. I feel if the primary or probable use is commercial in nature (HOTEL) than it should be a Certified General Appraiser to complete. Just My Thoughts.
 

Joyce Potts

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Feb 6, 2005
Professional Status
Certified Residential Appraiser
State
Florida
Just be careful of the restrictions, the rental rotation, etc. Most condo hotel projects around here are in SERIOUS trouble.
 

Vegan702

Senior Member
Joined
Feb 24, 2005
Professional Status
Certified Residential Appraiser
State
Nevada
NV agrees with your board and belives a CG should be doing them. They are currently debating the issue and don't know the outcome. Has to do with the highest and best use issue I believe.
 
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