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Subject rental section 1025-05

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Edward OConor

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Apr 27, 2006
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What is the proper way to handle the subject rental section:

The subject is a B3 in Bed-Sty. Your typical 18*42*3 with a basement. normally the walkin and the second floor is a 5/2/1 duplex with the third floor as a 3/1/1. The owner has converted the second floor to a 3/1/1. All three units have 1 year leases ending in 5/08. The rents are (in order) $1,500.00, 1,400.00 and 1,200.00.

How am I supposed to reconcile the subject rental section? Should I combine the 1st and 2nd floor and add the rents? Then list the correct market rents?

I've already addressed the legality but the report is an "as-is" only. I don't get these very often usually the additional unit is in the basement.
 

James Micozzi

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Jan 13, 2005
Professional Status
Certified Residential Appraiser
State
New York
What is the proper way to handle the subject rental section:

The subject is a B3 in Bed-Sty. Your typical 18*42*3 with a basement. normally the walkin and the second floor is a 5/2/1 duplex with the third floor as a 3/1/1. The owner has converted the second floor to a 3/1/1. All three units have 1 year leases ending in 5/08. The rents are (in order) $1,500.00, 1,400.00 and 1,200.00.

How am I supposed to reconcile the subject rental section? Should I combine the 1st and 2nd floor and add the rents? Then list the correct market rents?

I've already addressed the legality but the report is an "as-is" only. I don't get these very often usually the additional unit is in the basement.

check your pm
 

Claude From NY

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Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
New York
Commonly found in the brownstones and limestones throughout Sunset Park, Park Slope, Downtown and Bed-Sty. If it's a two family, the garden level (walk-in) and the second level is typically utilized as a duplex apartment. The third level is the second unit. Then it could get tricky, sometimes the tax classification is for 3 units but the c of o is for 2 units.
 

Edward OConor

Thread Starter
Member
Joined
Apr 27, 2006
Professional Status
Certified Residential Appraiser
State
New York
Commonly found in the brownstones and limestones throughout Sunset Park, Park Slope, Downtown and Bed-Sty. If it's a two family, the garden level (walk-in) and the second level is typically utilized as a duplex apartment. The third level is the second unit. Then it could get tricky, sometimes the tax classification is for 3 units but the c of o is for 2 units.

I have less of a problem with the lower usage of a property than an increase in use. The loss of the income due to a city inspection makes me nervous. Added to that is the changing demographics has the rent in the subject have the rents almost $500.00 higher than averge 3/1/1 per unit for the area. The 3/1/1 are leased (as per the owner) similar to that of small 6/3/1 units or 5/2/1 duplex units. I have rental comps from a similar building on the same street for 4/2/1 and 5/2/1 for $300.00 less than the subject's 3/1/1 rents.

I guess that I am off to disclosure hell with this one.
 

Kevin Mc

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Jun 7, 2004
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Certified Residential Appraiser
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New York
Hmmm.

Rents seem a bit fat, but I'm not sure where in BS the subject is. If you are west the rents are typical, if you are east they are high. It is what it is. What you have is fairly common(albeit illegal) but there aren't any egress issues so just report what is there "as-is". What is the problem? Your GRM will be out of whack, state as such on the report and go from there. What you have is an underwriter decision, not an appraisal decision.
 

Edward OConor

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Member
Joined
Apr 27, 2006
Professional Status
Certified Residential Appraiser
State
New York
Rents seem a bit fat, but I'm not sure where in BS the subject is. If you are west the rents are typical, if you are east they are high. It is what it is. What you have is fairly common(albeit illegal) but there aren't any egress issues so just report what is there "as-is". What is the problem? Your GRM will be out of whack, state as such on the report and go from there. What you have is an underwriter decision, not an appraisal decision.

The property is in the high 200 block of van buren. MLS has the rents at 208 that I listed above. Since the current rents are so high I will probably use the estimated (disclose) and let the lender figure it out. The highest leases appear to be with tenants that couldn't afford Park Slope of Clinton Hill. We old timers called them "Yuppies". This is the second or third time that I found this east of Bedford Ave.
 
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