Method for calculating bulk sale discount for 13 residential condos

[Zoe]

These are somewhat conflicting posts - the consensus in this thread seems to be to do a DCF, which is certainly an option if the individual values are sufficiently higher to support sales expenses, but this would not emulate market behavior if the most likely purchaser would have no plans to sell individually. I'm kind of surprised that so few appraisers in other markets haven't seen this type of behavior, as it has been plenty of times for me and I don't recall many times where they actually ended up trying to sell off the units individually.

Condos have individual property rights. The Condo association don't own the individual property rights on a unit. If all 13 units are vacant?

It sheds different light on the whole complex.

 

[Zoe]

I would probably want engineers report on it if all were vacant and then do it "as if completed" and "as is" to be sold as a whole...........if all were vacant.

Is the condo association broke? Give me accountant records.

I set SOW.

Rent roll, income/expense statements last 3 years.

 

[Zoe]

13 units in low income area is very small for a condo development.

I can get records I need. If not, I punt.

 

[Zoe]

Have you ever heard of fee up front just for engagement? I have.

 

[Gobears81]

Condos have individual property rights. The Condo association don't own the individual property rights on a unit. If all 13 units are vacant?

It sheds different light on the whole complex.

I agree, but that does not bind us to valuing the property in a manner that may be contrary to how the most likely purchaser would.

The OP mentioned affordable housing - that is a clue to me that renters would be a very likely portion of the mix, though I don't know all of the facts. What is really different between 13-units that have separate parcels and 13-units with a single parcel? The right to sell the individual units separately...but if the units aren't so much lower in value (or any lower) as a group, it doesn't make much sense to put up the individual units for sale, especially when you have to pay 6% or so for a commission.

The vacancy component would require a discount for lease-up, perhaps in either type of valuation.

 

[Zoe]

I agree, but that does not bind us to valuing the property in a manner that may be contrary to how the most likely purchaser would.

The OP mentioned affordable housing - that is a clue to me that renters would be a very likely portion of the mix, though I don't know all of the facts. What is really different between 13-units that have separate parcels and 13-units with a single parcel? The right to sell the individual units separately...but if the units aren't so much lower in value (or any lower) as a group, it doesn't make much sense to put up the individual units for sale, especially when you have to pay 6% or so for a commission.

The vacancy component would require a discount for lease-up, perhaps in either type of valuation.

Sir I get a fee up front to even consider this assignment. Do you understand?

 

[Zoe]

When I receive my fee up front, I start working on it.

It don't have to be the whole fee. Privity is established when I get the first fee from the client.

 

[Zoe]

I agree, but that does not bind us to valuing the property in a manner that may be contrary to how the most likely purchaser would.

The OP mentioned affordable housing - that is a clue to me that renters would be a very likely portion of the mix, though I don't know all of the facts. What is really different between 13-units that have separate parcels and 13-units with a single parcel? The right to sell the individual units separately...but if the units aren't so much lower in value (or any lower) as a group, it doesn't make much sense to put up the individual units for sale, especially when you have to pay 6% or so for a commission.

The vacancy component would require a discount for lease-up, perhaps in either type of valuation.

I won't speculate without retainer fee. I like your speculation.

 

[Zoe]

I can stop at anytime. I will be in constant contact with you once I receive that retainer fee. Your my client.

Privity is in full force. You tell me to stop. I stop. This is your final bill.

Please pay within 30 days. Late charges do apply at $0.83% per month.

 

[BRCJR]

But we don't know client requirements. What about cash sale?

Who is this client? Is it the owner?

Is it a lender?

Let's assume client says I want 12 month liquidation value.

You see the problem?

Read the first portion of my comment. Why do you waste bandwidth?