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North Florida apartment sales

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Kathy in FL

Thread Starter
Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Florida
I hate pestering people for comps, but does anyone have any sales of small (less than 15 unit) complexes in small rural towns? (You'd be surprised, but two-redlight towns don't have that many sales!!!)

Kathy
 

Austin

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified General Appraiser
State
Virginia
I do a lot of work in small towns and on oddball properties in which there are no comps and for that reason the cost approach won't work. The one universal formula that always works is income ratios. I don't care where you go, after you consider district trend, property condition, risks, vacancy history, expense history and projections, etc., the cap rates and multipliers will be the same. If you treat the above mentions items properly the depreciation and obsolescence will be accounted for and your conclusion will be reasonable. If you don't have an apparent market due to limited size of one particular type property, my theory is to create one that makes sense. Even if you have nothing to base value on, if you can support an income and expense projection, you can use the band of investment method and create a reasonable model. The most important and least recognized value-influencing factor is good appraisal judgment.
 

Kathy in FL

Thread Starter
Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Florida
I like your approach. If an investor were to think about purchasing the property, I think income is most pertinent. However...getting enough data to get a cap rate concerns me.

I also bet that if I turn in an appraisal with no market approach that someone at the bank will ship it back, call me incompetent, and take me off of their list. (Regardless of whether or not it is reasonable...whoever said banks were reasonable...or knowledgeable about appraisals, for that matter.)

Nice to see someone thinking outside of the little box!!!
Kathy
 
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