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Single Family Ranch That's A Day Care

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Frank Bertrand

Junior Member
Joined
Aug 21, 2002
Professional Status
Certified General Appraiser
State
Pennsylvania
3400 sf ranch on part basement. 11 rooms, 1 BR, 7 daycare play rooms (wall to wall carpeting, no furniture except kids play stuff, typical colors) full bath with low sink (for kids use) 1 bath for family. Dining Room turned into a kid's lunch room with vinyl floor, a wall mounted shelf (again at kids level) that goes around the entire room.

typical MBR of owner with bath off to the side.

So, what do you do with a licensed care provider that knows the GLA of their home (for tax purposes!!) No zoning, so anything goes--including the horse barn, two MH's for 'storage' and 16.6 KVA power line that cuts through part of the propety.

anybody have any experience with these puppies??
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
LOL finda at least one comp?

Seriously you do have an interesting assignment.

What would the typical buyer peceive the property as: functionlal with a discount for minor remodleing/paint... or soemthing that would need major overhauling to be a home?

OR would there be another daycare provider salivating at the properties potential 'as is'?

hope you bid high and often after the inspection :rolleyes:
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
I agree with Lee Ann.

First I would determine what is the "Most Probable" buyer looking for in a house this size in the market. If it is as a single family residence than I would think that you would do the house as a single family taking the cost to cure the day care alterations (do away with it) as an adjustment in the sales grid and in the cost approach.

Whatever you do, you know that the owner is not going to agree with you because of all of the money they have into the place to set it up as a day care. Tell them that since there is no zoning, and they want to include all of the day care paraphernalia, you would be happy to do the house as a commercial appraisal. You'll need operating expenses and tax returns for the past 3 years and oh yes, the fee will be about 4 times the fee for the residential report. That will settle their hash.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
I would "RUN LIKE THE WIND". I bet they want a residential loan too!
 

Walter Kirk

Senior Member
Joined
Jun 24, 2003
Professional Status
Licensed Appraiser
State
New Jersey
I did a similar property this week, 3000 SF ranch with finished basement used as a day care. The property has an in law suite and a barn. I determined that the property was not a licensed facility, the operator did have a license. I checked the zoning, single family, and I compared the property with other large ranch style houses in the area. I of course took adjustments for the in law suite and the barn.
 

Richard Carlsen

Elite Member
Joined
Jan 15, 2002
Professional Status
Licensed Appraiser
State
Michigan
I just did a visit yesterday to a house that will be my 3rd appraisal on it in the past 6 years. She runs a licensed day care. Since the family lives there, I will not mention the day care business in my report since I am appraising the real estate. What they do with it has nothing to do with the value of the real estate unless it physically impacts the real estate (which it doesn't).

It would be the same as if, when I refinanced my house in February, the appraiser commented on and considered that I ran a real estate appraisal company out of the house. Nothing whatsoever to do with the value of the real property.
 
Joined
Jan 13, 2002
Professional Status
Retired Appraiser
State
Florida
Richard,

Yes, but.... the physical changes they have made to the house in question in this thread would have an impact.

I would do and have done what Lee Ann said.
 

Mountain Man

Elite Member
Joined
Jan 15, 2002
Professional Status
Certified General Appraiser
State
Georgia
I've done some of the same type.
Highest and best use. Residential? I've done like Lee Ann said and discount for conversion.
Commercial? you are getting into a complex, narrative report.
 

Frank Bertrand

Junior Member
Joined
Aug 21, 2002
Professional Status
Certified General Appraiser
State
Pennsylvania
Thoughtful posts all, and as for physical characteristics, the physical setup is a detriment as all the 'daycare' rooms are interconnected as there is no central corridor through the home, so most of the rooms are captured.

The bath with the kiddie sinks and toilets would again be functional curable, as would the kiddie mess hall with the kiddie size eating shelf round the whole room.

then there is the horse barn, small pasture, etc. As for size, the typical ranch is around 2000 sf, and comps are difficult in this rural area. I contacted the bank and asked what their pleasure is on this. Maybe they will punt as I gave them the option, "income or residential" As for PGI, I figure about $100K based on local charges and max of 14 kids (steady). Also takes kids for 2nd & 3rd shift.

I figure about 100K a year gross
 
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