Multi family vs ADU

[Airstream]

I'm often wrong, but I don't understand how that is possible, although I'm trying to stretch my mind around the idea as we speak. It's a very interesting perspective but somehow seems to be fraught with bias in an attempt to increase value rather than to report most probable value...but I'm trying to figure it out..

How can you not get your head around that sometimes the H&BU is not completely apparent? I have run across this numerous times.

 

[ZZGAMAZZ]

How can you not get your head around that sometimes the H&BU is not completely apparent? I have run across this numerous times.

That is not the issue by any means. What I obviously don't understand is how the client's intentions to extend a loan based upon a specific property type can be taken into the appraiser's Scope of Work when the client instructions presumable were made without any consideration for the true, current status of improvements in context with the local market as well as HBU, zoning, etc., etc. That having been said --as Nephew Glenn often says -- the appraiser must also give consideration for the underlying "business decision," but not to the extent that the basis of the Scope of Work is based upon the client's desire to fit the loan into a desireable package to enrice a property owner into a mortgage arrangement. [Maybe your perspective and mine actually are a lot closer than we realize.]

 

[Airstream]

That is not the issue by any means. What I obviously don't understand is how the client's intentions to extend a loan based upon a specific property type can be taken into the appraiser's Scope of Work when the client instructions presumable were made without any consideration for the true, current status of improvements in context with the local market as well as HBU, zoning, etc., etc. That having been said --as Nephew Glenn often says -- the appraiser must also give consideration for the underlying "business decision," but not to the extent that the basis of the Scope of Work is based upon the client's desire to fit the loan into a desireable package to enrice a property owner into a mortgage arrangement. [Maybe your perspective and mine actually are a lot closer than we realize.]

Probably. The problem with lenders is they don’t do research on the property before they talk to the borrower. Then the appraiser in the field has to bring it up. About 5 years ago I was doing an appraisal in a small city of about 10,000. The property I was asked to appraise was zoned SFR, but it was the only one on the block! Clearly they had a friend in zoning. And it wasn’t being used as an SFR AND EVERY property around it was zoned commercial with all kinds of shops. I immediately called up the lender and said H&BU is most likely commercial zoning with neighborhood basically transitioning to that. Obvious as nose on the face. Lender canceled it. But the borrower was trying to pull one over the lender. I have come to the conclusion most lenders are ill-informed about what they are doing. This has happened a number of times where lenders send me out and I go “no way” this is SFR.

 

[ZZGAMAZZ]

... and like it happens 1 million times on the AF, a thread gets reflected by a new assignment, i.e., I just got an FHA purchase assignment for a SFR with a Jr. ADU that is ATTACHED to the SFR with direct interior access as well as direct exterior egress. So.... SFR with an attached ADU, or SFR with an enhanced living area? Initial thought here is that it can be either, both legally permissible, and consequently I need to conduct a true HBU maximally-productive analysis to determine which of the two alternatives reveals the highest market response.... kinda totally contrary to the advice I gave an hour ago.....

 

[Airstream]

... and like it happens 1 million times on the AF, a thread gets reflected by a new assignment, i.e., I just got an FHA purchase assignment for a SFR with a Jr. ADU that is ATTACHED to the SFR with direct interior access as well as direct exterior egress. So.... SFR with an attached ADU, or SFR with an enhanced living area? Initial thought here is that it can be either, both legally permissible, and consequently I need to conduct a true HBU maximally-productive analysis to determine which of the two alternatives reveals the highest market response.... kinda totally contrary to the advice I gave an hour ago.....

Yep. My guess. It won’t be clear. More and more cities are allowing ADUs to deal with housing shortages. Are we going to call these all multi-family? I have had a similar situation by the way.