Proposed New Construction For Only The Exterior Of The Home

[George Hatch]

Problem identification always comes before SOW decisions. You can waste a lot of time/effort trying to round the corners off the square peg before surrendering and treating it like the square peg.

For sure marketability is going to be an issue. In some market segments at the upper end it's common for the buyers to remodel the interiors to suit regardless of the condition of the existing interior. THEY wouldn't be deterred by a "warm/cool shell" condition. Loft units aimed at the urban chic buyers sometimes sell like this.

But other than those folks who is the typical buyer for such a unit when it's located out in the 'burbs? Prolly a contractor or flipper and and mostly not an owner-user; right? So correctly identifying the most likely types of buyers would be part of the appraisal problem. You can't pick your comps until you identify them because the contractor/flipper or the art-chic hipster really are looking for different attributes than the T-Ball dad. .

 

[sebridges]

Oaky, if you think the level of replacement and remodeling is C 3 and quality is Q4, then find the most similar comps of C 3 and Q 4, if they exist in area , and make report subject to completion per specs.

Needle in a hay stack.......it as rural as rural gets. Combined, it'll be a 30 acre parcel. Good times bracketing a small 50 year old, plain farm house with that much acreage and in C3 condition.........let us not forget the shed and the barn.

 

[George Hatch]

Going back to what I was saying, if you were to figure out that the most likely buyer would be a flipper you can start to emulate the thinking THEY would be applying to this situation. They would buy the unit, front the cost to cure (if it's a remodel or fixer) or complete (if the unit was incomplete) and then sell for a profit. So that equation looks like this

Acquisitions costs + hard costs to cure/complete + contingency factor for the unknown + investor profit to undertake the risks involved = retail value upon resale.

Since the "as is" value is the question to be answered in an appraisal you would just reverse the equation to leave that acquisition cost as the residual:

Retail value upon resale - (hard costs + contingency + profit factor) equals "as is" value.

 

[Tim The Enchanter]

You need to figure out who is the typical buyer for this shell game. Err, property.
Not 3 card Monty.

 

[J Grant]

Needle in a hay stack.......it as rural as rural gets. Combined, it'll be a 30 acre parcel. Good times bracketing a small 50 year old, plain farm house with that much acreage and in C3 condition.........let us not forget the shed and the barn.

Your appraisal problem is quite different than the OP problem...now that you gave the information of 30 acres, the acreage imo is the dominant feature of the property and the key to comps for it....bringing a farm house into C3 condition is not that costly or important ( imo) than the large multi acre site....just do the best you can to find houses on the most similar acreage you can, adjusting for condition or upgrades is usually fairly straight forward...can I assume if rural a number of properties might have barns or sheds? Whether this combined acreage is HBU as residential ( if you are doing it as a residential appraisal ) might be another issue ,needing its own thread if it is.

 

[Tim The Enchanter]

the dominant feature

The dominant feature will also help define the typical buyer.
Marginally non related video.

 

[Mark K]

You need to figure out who is the typical buyer for this shell game. Err, property.
Not 3 card Monty.

I've seen a few shells sold, generally a builder goes bankrupt or 'owner-builder' hit financial problems (spent $ on boat, truck, etc.) and walked leaving the bank with a shell. The OP's situation kinda screams out future foreclosure.

Buyers have been investors and they paid about 50-75 cents on the 'cost' dollar ($200K total in lot and shell, sold for $100- $150K) and then went on to finish the house, sold for good profit.

 

[Mr Rex]

I've seen a few shells sold, generally a builder goes bankrupt or 'owner-builder' hit financial problems (spent $ on boat, truck, etc.) and walked leaving the bank with a shell. The OP's situation kinda screams out future foreclosure.

Buyers have been investors and they paid about 50-75 cents on the 'cost' dollar ($200K total in lot and shell, sold for $100- $150K) and then went on to finish the house, sold for good profit.

My thoughts exactly. The lender is obviously a maroon.

 

[Renee Healion]

That has been my question--who would lend on this? Most lenders live in fear that they will end up with one.

Also, new truck may be used to carry a kitchen sink from the dump, to be set on sawhorses, discharging through some pieces stepped down with radiator hose clamps to a hose going outside, terminating however long the hose is.

 

[Mr Rex]

Says the lender to themselves....