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Starting My Own Commercial Appraisal Company (where To Start)

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Value in the 850

Freshman Member
Joined
Feb 2, 2017
Professional Status
Certified General Appraiser
State
Florida
I am a state certified general appraiser with about 11 years of experience, and I have had my state certified general license since 2008. I'm currently working for a small firm and looking to branch out on my own. I'd like to know what steps I should take (in order) to go about doing this. Also, should I go ahead and leave my current place of employment? Or stay on until I am completely setup and ready for business. I'm aware that I will need to do the following:
Create a Company Name
Create a Company Logo
Form an "S" Corp, or an LLC
Apply for a business license
Obtain E&O Insurance

I guess what I'm concerned about, is getting on with AMC's. Banks and other sources that I can gain appraisal requests from. Then, as I will only be doing commercial work, should I rent a small office first, or do you think I can work from home until I'm positive that I will have enough business to make it. Finally, I'm a firm believer in technology, and I would be interested in suggestions about software for the actual commercial report, for data storage (Comparable Sales and Leases) and for invoicing and keeping track of on-going work and other office tasks. And lastly, any honest opinions about the future of the appraisal industry (on the commercial side) is welcomed. My decision is down to starting my own company or leaving the appraisal industry (at least as a fee appraiser).

Any advice and/or suggestions is greatly appreciated!!
 

Red Flint

Member
Joined
May 15, 2005
Professional Status
General Public
State
Michigan
Stay until you have savings of one year of expenses. Expect the second year to breakeven, or could be worse if economic recession. Most startup companies fail due to lack of cash capital.

A local SBA is a good resource, it is federally funded and mostly free.

You will be competing for clients, so broaden your geographical expertise to weather gaps in steady income streams.
 

Value in the 850

Freshman Member
Joined
Feb 2, 2017
Professional Status
Certified General Appraiser
State
Florida
Thanks Red!!

I have enough in savings to cover startup expenses for one year, but then I'd be tapped out. So I guess I'm wondering if it's a good idea to start my own appraisal firm, which will be a one man shop for awhile at least, while still working for my current employer, or just go all out and leave and concentrate solely on my new company. Also, what is the overall consensus on the commercial appraisal industry? Is it a dying industry? I know everyone will cite average appraiser age and lack of new appraisers, but the physical requirements for this profession are minimal, and I'm sure many "aging" appraisers will continue working for years to come.
 

Red Flint

Member
Joined
May 15, 2005
Professional Status
General Public
State
Michigan
Thanks Red!!

I have enough in savings to cover startup expenses for one year, but then I'd be tapped out. So I guess I'm wondering if it's a good idea to start my own appraisal firm, which will be a one man shop for awhile at least, while still working for my current employer, or just go all out and leave and concentrate solely on my new company. Also, what is the overall consensus on the commercial appraisal industry? Is it a dying industry? I know everyone will cite average appraiser age and lack of new appraisers, but the physical requirements for this profession are minimal, and I'm sure many "aging" appraisers will continue working for years to come.


As Gary DeWeese is wont to say, the answers to your questions are ‘it depends.’ If you are a commercial appraiser in a rural area, your odometer may be advancing quickly. You cannot force a client to order an appraisal from your firm. There is risk as this is a relationship business built on reputation, and client needs can change quickly.

It may be worthwhile to think of yourself as an appraiser who can value any property, rather than pigeonhole into just commercial. This is a route towards work without residential form valuation. There are many, many good writings on this forum regarding clientele, use the search function. You can search for S company or LLC, but be sure to spend wisely on actual legal and accounting advice (CPAs and attorneys also make great clients for some).

Look around, there are more buildings in most areas each time you look, and important use and value decisions are needed by lenders and other stakeholders. Over time, involvement in contract leasing may build valuation work just in leased fee interests. Appraisers are sometimes needed when owners die and everyone grows a year older this year. Good luck.
 

AMF13

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
Work from home, at least to start. Why pay for an office if you have room at home for you and a desk?
 

Kate_nelson

Freshman Member
Joined
Jul 8, 2017
Professional Status
Real Estate Agent or Broker
State
New York
I agree with Lee. Anyone can start from home. I have started mine a year ago. Thinking about expanding my business and having a office from next July, a year later. At first I can't spend too much. I even subscribed to a free accounting software. If you find it https://zipbooks.com/bookkeeping-services/ . I just want to say you can start with one/two with your best friend and from home. For one year just build more communication and trust. This will lead you to success.
 

Howard Klahr

Senior Member
Joined
Oct 4, 2004
Professional Status
Certified General Appraiser
State
Florida
I guess what I'm concerned about, is getting on with AMC's. Banks and other sources that I can gain appraisal requests from.
This is your number 1 issue. Everything else is secondary. Many licensees can perform the assignments, yet the biggest challenge of running a business is obtaining an on-going flow of business. As an employee it appears much easier than the reality.

As a commercial appraiser you should be able to perform a market analysis of your appraisal business that will then formulate the basis of a marketing plan. Additional resources include not only the SBA but also SCORE. You can either develop a proper business plan or learn from your mistakes but a business plan is much cheaper. A true business enterprise is more than just accepting orders from whatever comes along. My recommendation is to look into this further before you leap
 

CindyR

Senior Member
Joined
Oct 26, 2003
Professional Status
Certified Residential Appraiser
State
Arizona
I am a state certified general appraiser with about 11 years of experience, and I have had my state certified general license since 2008. I'm currently working for a small firm and looking to branch out on my own. I'd like to know what steps I should take (in order) to go about doing this. Also, should I go ahead and leave my current place of employment? Or stay on until I am completely setup and ready for business. I'm aware that I will need to do the following:
Create a Company Name
Create a Company Logo
Form an "S" Corp, or an LLC
Apply for a business license
Obtain E&O Insurance

I guess what I'm concerned about, is getting on with AMC's. Banks and other sources that I can gain appraisal requests from. Then, as I will only be doing commercial work, should I rent a small office first, or do you think I can work from home until I'm positive that I will have enough business to make it. Finally, I'm a firm believer in technology, and I would be interested in suggestions about software for the actual commercial report, for data storage (Comparable Sales and Leases) and for invoicing and keeping track of on-going work and other office tasks. And lastly, any honest opinions about the future of the appraisal industry (on the commercial side) is welcomed. My decision is down to starting my own company or leaving the appraisal industry (at least as a fee appraiser).

Any advice and/or suggestions is greatly appreciated!!
you probably don't really need a company logo...
 

JTip

Elite Member
Joined
Oct 12, 2004
Professional Status
Certified Residential Appraiser
State
Pennsylvania
buy a nice desk, high speed internet, loaded computer with dual screens (or one big one) and set up shop in your house.

I've made a nice chunk of PT money from my little home office.

edit: only get an office when you are making TOO much money.
 
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