"Rooming house"

[KJLhoxtrot]

Have you considered using comparable sales?

There's always one guy.

 

[Sadie]

Try and separate use from what it actually is. Also some zones do not allow for more than a certain # of unrelated people living under one address w/o a CUP. CUP does not transfer, so figure out if its an atypical layout and then either cost to cure or say HBU is not as a SFR.

 

[KJLhoxtrot]

Since you have no idea how to appraise it, the first step is to give it back. Lack of competence and no experience with it leaves you open to the complaint- plus it might be seen as a commerical hotel type assignment which is beyond a res license-

PS_ if subject is a SFR that someone is renting out a bunch of rooms in the current hotel like HBU might not be legal -

If we "gave everything back" then sooner or later there will be no appraisers left with competence to do anything, other than what we learned as a trainee. I'd rather gain the competence.

 

[George Hatch]

It's appraisal problems like these when lenders have the most genuine need for a good appraisal. The primary ingredient in solving the tough ones is patience and perserverance, not technical wizardry. Sticking with the problem and working it one step at a time even if you are throwing a ton of research into the sales data.

If you can develop a reputation for working the hard cases you probably won't make any more money when times are good but it will pay off when times are bad.

 

[Terrel L. Shields]

'd rather gain the competence.

Find someone that has done one to help you.

I would not use a form but rather I'd use a narrative. However, if a form, use a general purpose form. Scour for other similar sales. Go back3 years and 30 miles if you have to. Otherwise, you are stuck with a cost approach appraisal and that's scary.

And, yes, there is a question of whether your license allows you to do this or not so check with the board.

 

[Zoe]

You can't ignore the income cap approach on it. Both sales (if possible) and income cap required. Cost approach is fine.

Need at least 2 years of income/expense statements and rent rolls.

You could use like GRM if you could estimate market rents on similar properties that have sold.

That would be easier than income cap method but you could do both GRM and income cap on the income stream.

Income cap may be easier on the income approach. You may have to build a cap rate and cap the projected next 1 year income based on past

income/expense and rent rolls and other market data available.

 

[Zoe]

Look on the internet and search how to build a capitalization rate on the income stream. You can do that. Do direct capitalization on a 1 year pro forma income stream.

It is way better to extract a cap rate from the market, but you may have limited data to do that with. A rent multiplier approach on income may be your easiest approach. You can't ignore the income approach.