Park-Owned Home in Mobile Home Park

[ShawnK]

I am working on an appraisal of a 179-site mobile home park with five park-owned homes. None are attached to a permanent foundation. There is some disagreement within my office as to how to handle the park-owned homes. We are appraising the fair-market value of the property for estate-tax purposes. I am trying to figure out if I include an estimate of the value of the homes (which should technically be considered personal property) in the value of the appraisal. Can anyone give me any ideas what the industry standard is here? It seems to me they should not be included as the owner could move them off site if they wanted to, but others in the office are disagreeing with me. Please let me know what you all think.

 

[Dublin ohio]

Although not real property. They are still an asset. Could generate rental income. But like you said. They could be moved at any time. Regardless. They are still part of the estate. Value as used mobile homes?

 

[Tim The Enchanter]

They are still part of the estate. Value as used mobile homes?

This makes sense to me, but the job is above my pay grade.
Seems the mobiles are probably not worth much though.

 

[Terrel L. Shields]

We are appraising the fair-market value of the property for estate-tax purposes. I am trying to figure out if I include an estimate of the value of the homes (which should technically be considered personal property) in the value of the appraisal.

In my state they are still considered real property. However, to CYA, value them via NADA book. Then in the description say they are "personal property" (if that is true in CA) and add in your certification and rights appraised section, that it complies with the proper standards for Personal Property (Std 7-8)

Since this is an estate, treat it as a unitary holding and value the whole mess- do your NOI with the personal property income and apply your cap rate. Hopefully, you have some MH Park comps to extract the cap rate. This is not secondary market. If only for estate purposes, then the lender rules do not apply. (I am assuming you are doing a narrative report) and use the IRS definition of Fair Market Value.

The estate needs the entire property appraised. Just do it. Segregating the personal property from the real property except to identify each, is a waste of time. I would be surprised if anyone even notices that this is treated as "personal property." If for a bank, however, you would have to separate the personal property value from the real property since banks lend differently according to whether it is real or personal property.

 

[nstanbru]

What Terrel said. I had a similar situation several years ago with 2 or 3 park owned units. IMO, it all boiled down to the income. We're in CA and it's not that easy to just move these units. Any presumed sale, also IMO, would also include these units. I agree with the others in your office, include them.

 

[Russ Kitzberger]

Federal estate tax or State estate tax?

 

[Russ Kitzberger]

If you are doing IRS, you need to scope with the tax attorney if they want you to value only the realty and they are going to have the FMV of the interest the estate has in the going concern separately valued.

If the entity/estate owns the personal property or trade fixtures, they might be better off having you (if you are competent) value both the realty and the pp/trade fixtures, then getting that over to the accountant or business valuer for the entity/estate holdings valuation. If you can do going concern, that is an option too. I would anticipate it would be easier to have the PP/TF in one report rather than trying to have the business valuer add it in later, but that is up to whomever is doing the entity/business valuation to reflect the overall estate holdings.

 

[Elliott]

I've always said, "Sorry, I've never done one and there are very few sales, its not like the regular real estate market I'm use to."
I've probably lost a half dozen assignments, but don't regret it.

 

[Tim The Enchanter]

Sorry, I've never done one

That's all I need. Throw the competency card and be done.

 

[NachoPerito]

We generally include the mobiles in the real estate, but not sure about industry standard. Regardless, we don't give much value to the mobiles.