Operating Income Statement

[Kim Thompson]

I have been asked to do an Operating Income Statement for a property I appraised weeks ago. At the time of the appraisal we were told that it would be owner occupied (this was a purchase). It is currently owner occupied and set to go to closing 05/31/2005.

I explained to the Lender that we have not had a request for one of these in over 5 years as we live in and appraise in area that does not have many rentals. They said to do it anyway as there was no way they would be able to get another Appraiser to complete it prior to closing since they did not do the original report.

They did not send me any information other than the phone number of the Lady buying the home. What do I do? I am beyond rusty.

I have already informed the Lender of my incompetence in completing one of these--they did not seem to care.


Kim Thompson

 

[Otis Key]

Kim - is this a purchase or refi?

Purchase - - then it sounds like an investment property aspect from the buyer and so they will require it. You'll need to check with the boss and then call agents, buyer, property management companies and other appraisers to establish some sort of rental rate, estimate expenses and send the form out, with the appropriate fee charged. Expenses can be based upon other rentals in that area

 

[CANative]

There's no law that says you have to accept every assignment.

You first need to estmate market rents for properties similar to the subject. This can be reported on the single family rent schedule (FNMA form 1007) Call property mangers in the area and ask if they can provide you with rental rates, addresses and characteristics of similar properties (you can verify data from MLS and online records) Enter the data and make adjustments to the comparables if necessary and determine the market rent.

The just fill out the 216 (operating income statement) If the property is already rented and you know the amount, use that unless it is more than market rent. If it is more, than use your estimated market rent. The form is pretty self explantory. You can get information for replacement reserves in section E of marshall and swift.

In the comment section, state that the lender is to complete the monthly housing expenses and cash flow since they didn't provide you with anything.

Charge them as much as the original appraisal if you want. I charge about $250 for doing these. It's REALLY hard to get rental data.

 

[Kim Thompson]

Thanks for the info. This is a purchase which is currently owner occupied--it has never been rented. There have only been three rentals in the past year--Lucky Me!

I will stumble through this best I can and get an Appraiser friend who is General Certified to look it over. He is out of town this week or I would have just asked him for help.

Kim Thompson
"Will work for food!"

 

[Otis Key]

That pretty well narrows down your rental rate, expenses, etc. Good luck with it.

BTW, an experienced Res Cert can also help you explain it, look it over and assist. Doesn't have to be a gen cert.

 

[Peter LeQuire]

I must be really simple, but the operating income statement has never intimidated me. Replacement reserves are short lived items - their useful lives can be gotten from Marshall Valuation Service; their costs from Home Depot; maintenance expense from anybody who owns a house. Unless you were also asked for a comparable rent schedule, the rent that is called for in the OI statement can be your estimate of the market rent for your subject, or the actual rent the subject generates.

 

[Otis Key]

Peter, agreed, but for someone who doesn't deal with them on a regular basis, they can be intimidating........including mortgage brokers.

 

[Ben Vukicevich SRA]

KIm

If your local MLS is "short" on SFD rentals, try researching the active listings in the multi-family section. They will typically list the rental figures for the units there. It's usually better than nothing and at least gives you something to work with.

Ben

 

[TC]

Getting rental data in my market is fairly easy, the local MLS has a search function for that info. You can always knock on some doors or call a couple of RE agents that handle rentals. All the info as to reserves can be found in either Marshall Swift or look at the local ads for carpeting and appliances in the Sunday paper.

As a side note, I would NEVER tell a client I am incompetent B)


TC

 

[TC]

oops :redface: :redface: :redface: