multi-family comp

[DTB]

You can NOT estimate market rents on comps, people. Please tell me I'm missunderstanding some of your posts.

I believe the OP was referring to a sales comp, not a rental comp. And yes you can estimate the sales comp rent based on your development of market rent, just as you estimate (project) it for the subject.

 

[Abester]

Estimate it to what end? What good is a cap rate or multiplier if the data from which it is derived doesn't actually reflect the operation of the property?

 

[DTB]

Estimate it to what end? What good is a cap rate or multiplier if the data from which it is derived doesn't actually reflect the operation of the property?

Surely your APODs are not developed from subject data only?? Owner doesn't reflect a sinking fund factor, you're not going to apply a market derived one? :icon_idea:

 

[Abester]

Huh? - I need Joyce... Sale and lease data should be reflective of the sale or lease COMPARABLE property at the time of its sale or lease. That includes contract rent data. If the sale' lease isn't reflective of market terms and conditions (and the subject is supposed to be), then the sale is not a COMPARABLE sale and should be excluded on that basis.

 

[The Warrior Monk]

If the appraiser estimates a rent for the sale, it's an appraiser-made rent. Subsequent information derived from this data is also appraiser made.

 

[Howard Klahr]

What good is a cap rate or multiplier if the data from which it is derived doesn't actually reflect the operation of the property?

Cap rates, income multipliers and other indicators from comparables are not based upon historical operation of the property nor short term contract rates. What is significant in the analysis is the buyers expections/proforma. This is what the sale price was based on. All of this information is propertly derived from the conformation process.

 

[DTB]

If the appraiser estimates a rent for the sale, it's an appraiser-made rent. Subsequent information derived from this data is also appraiser made.

Okay, so what?

 

[Kevin A. Spellman]

If you forecast the subject's rents, you forecast the sales comparison rents. The forecasted rents should reflect the market price level as of the effective date of value, with support from the rental comparison. The rental comparison is not just for the subject you use this rental data to forecast the comparable sales also.

 

[Abester]

Cap rates, income multipliers and other indicators from comparables are not based upon historical operation of the property

I think there are some courts, buyers and sellers that would disagree with that.

 

[Howard Klahr]

I think there are some courts, buyers and sellers that would disagree with that.

Please provide your evidence. I am not aware of any court cases in the Southern District in which this was the case. In addition, this is how the methods are taught by all of the major appraisal organizations.