Residential ???

[Jo Ann Meyer Stratton]

About 8-9 years ago I did an appraisal of some property belonging to a couple that raced dragsters professionaly. They had built on five acres high up on the side of a mountain with excellant views. Access to their site was about 2 miles of private dirt easements. The site did not have water available, so water was hauled five miles from the nearest city metered water for water haulers in the area. The structure was 18' high, constructed out of galvanized iron walls and roof, the lower 5,000 square foot floor was their garage, workshop, equipment supply room, bath and utility room. The upper level was a 700 square foot livable area with living room, dining area, kitchen, bath and bedroom. Surrounding the livable area on two sides of the exterior was a wrap around balcony where they had views of the mountains 75 miles away. Construction quality and materials of everything was very good. And it was in an area where a famous architect in the Phoenix areas builds custom homes (and government buildings) out of galvinized metal. The highest and best use of the property was residential. So I found comparables of homes with 2,000 to 3,000 square foot attached and detached garages, houses with less than 1,000 square feet, houses on five acres or more, houses that hauled water--ending up with six comparables. Had pages of addendums that expained everything I could possibly think of. The loan closed without a whimper, call back or a word from the client or home owner. So after you have determined the highest and best use, then its research, research, explanation, explanation, explanation--and then the appraisers job is done. Then the loan officer has to go to work and earn their commission in finding the appropriate loan process for the borrower. So now I can say I have appraised a garage with an attached house instead of a house with an attached garage.

 

[Mike Garrett RAA]

residential

 

[Pamela Crowley (Florida)]

Jo Ann,

Good story! Thank you!!! Put's it into perspective.

 

[Don Clark]

8)

A few years ago I did an appraisal of a "Combo" property. The subject was located in a Historic area(no historic properties). It had a specialized type of zoning that the city had passed to stimulate the urban renewal of the area. In the fron was a one story brick "Art Studio"(use) building that was over 200 years old. The city allowed the owners to build a 2 story, new, vinyl sided residential property attached to the commercial property. This is how i handled the situation:

1. Appraised the residential property as SFR, and used the best, nearest, and most similar 2 story homes I could find.

2. Did a Narrative report on the 200+ year old "Art Studio" with 6 comparable size commercial shops/buildings within 3 miles.

Considered that the HBU was residential as that was more than 2/3 of total use of the site.

There was no problem with financing, and I never received a call form a UW.

Come on folks, use what you have. There are no perfect comps for imperfect properties. If you explain what you have done, why you have done it, and the fact that you cannot do anything different, it will work.

As to residential: The only real legal definition of residential comes from the IRS. It states, that, for tax purposes, if there is a place to prepare food, a place to dispose of human waste, and a place to sleep, it is residential. And, it does not have to be real estate to be residential.

Dom

 

[Larry Lyke]

Don --

Please run the below phrase past me again, would you.

"And, it does not have to be real estate to be residential."

 

[Farm Gal]

Larry:
Immediate example: Tin can (apologies to JoAnne)

Mobile home, taxed as personal property on a commercially zoned lot (to take it a step further...) I can think of two or three others...

Go Ahead Don, any other ideas?

 

[Don Clark]

8)

Larry,

According to the IRS Tax Code as long as there is a Toilet, a place to clean an prepare food, and a place to sleep. It is residential. Sail Boats qualify as do RV's, Mobile Homes, (Trailers, not permanently affixed), and there are now several Condo Cruise Ships where you can buy a cabin. Non fee simple time sharing qualify. There are other examples but this should give you the idea. No interest in real estate is required. Residential simply means where one can reside as a person, and do the aforementioned things.

Don

 

[Larry Lyke]

Thanks to you Dee Dee and Don --

You're talking about the ability to depreciate "something"-in-use.

And that's fine. I get you.