Two townhouses combined to one?

[Eric C]

There are more than 4 units in the subdivision but each building block is composed of 4 attached unit is what I meant. Ill inspect it today.

 

[CANative]

If this is for a lender and the HBU is something other than to continue the current use then the assignment is over. Notify the client and ask them what they want to do. The ball is in their court, not yours.

Why worry, be happy.

 

[Mile High Trout]

You can do this one man, no need to decline.

Great posts here, I read them all.

Let's keep it at the fundamental basic level though, this one is not that tough.

Assuming they are row townhomes and are all attached wall by wall, and are not those scrunched together older style townhome or two per build thing.

If they are row homes:

Value is two units combined, less cost to return to individual unit appeal.

Value gained through a combination can only be possible if:

economically feasible

legally permissible

accepted by market with other evidence to prove

possible and legal to recreate elsewhere, which essentially is already covered in the upper points.

For this assignment, it's not just about sales, it's about commonality. Now you'll have to manually research every single townhome through property record county, to see if anyone else did this. If they have, you pass the first gauntlet of value adding, and are on to the feasibility and replacement portion. If they have not had anything similar, you can jump right to individual analysis hypothetically as separate, and then subtract the cost to cure or in this case, cost to return to normally accepted market state.

Were the approach to be permissible and recreatable, it is still very possible that value will merely total a combination of the two, no more, no less.

I watched a show on this on cable just the other day. High end highrise buyers in places like NY routinely buy multiple condos and improve them, to get more space. It was one of those re shows, and they presented plans and specs about adding in stairs and possibly guaranteeing both unit purchases at once, or there was no deal. That's tough on your Realtor, but on this show, it was actually a real life example. There was also a comedy episode on this in the series 30 rock. Remember when Liz's apartments turned to condos and all of the sudden she needed to buy or move? Then she was daydreaming about being a home owner and could have more space by combining units? Her upper neighbor turned out to be a gay cop and she was playing all these games to try and get him to move, so she could be the one to combine that unit? Super funny man. If you relate this appraisal instance to a more common scenario like condo's you'll have your answer I believe. If it's walls attached, it's similar to condo. If you've got a duplex which is a single, you're in similar ground, but there may be a difference. You're the appraiser, you make the call!

 

[Mike Garrett RAA]

My brother did that on Coronado Island. Bought two first floor condos to make one larger unit.

 

[Eric C]

I inspected the property. The exterior is intact as it if two separate units. Two driveway and even two main entrances appeal. The interior is one ridiculous humongous place. They had so much space that every bedroom, bathrooms, and living areas are a bit oversized. The two garages are combined inside. Its has only 1 kitchen. They added a pool in the patio that overlaps both "sites". Im guessing cost to reconvert would include removing the pool correct?

I think reconverting back to 2 units is very possible. But how do I come up with a cost?

 

[CANative]

I inspected the property. The exterior is intact as it if two separate units. Two driveway and even two main entrances appeal. The interior is one ridiculous humongous place. They had so much space that every bedroom, bathrooms, and living areas are a bit oversized. The two garages are combined inside. Its has only 1 kitchen. They added a pool in the patio that overlaps both "sites". Im guessing cost to reconvert would include removing the pool correct?

I think reconverting back to 2 units is very possible. But how do I come up with a cost?

Your assignment (as originally designed) is over.

 

[Eric C]

Your assignment (as originally designed) is over.

That may be so but I would still like to know what I would have to do if it wasn't for lending purpose. I'm sure I can go through my whole career avoiding assignments like this but I still like to learn.

 

[J Grant]

cost to cure, remove pool, put back wall, build one new kitchen, demolish, file for permits, loss of use/carrying costs of unit during construction , rebuilt 2 new patios. Is the cost to cure the diff between value of two combined and the poss value of the 2 units separate?

From your desciption, the combined units sound awkward and super adequate and not well designed. However, you still don't know if there is a market for large combined or just large townhomes in area (or else just have not posted that part yet) Of course the exterior still looks like 2 sep units with 2 driveways...just as the ext of 2 combined condos will look the same, usually the HOA or condo assoc does not allow much ext change even though they might allow interior combos (in this case the builder did it before HOA existed, doubtful the HOA would have approved the pool )

 

[Mile High Trout]

Well Eric it just got a lot more complicated then.

What' you're dealing with is an inherent difference related to initial build, not just conversion.

As you stated, the builder built it that way. There could have been structural differences in assembly and weight bearing, etc. Normally with a conversion, you'll just see one wall knock out, a see through knock out, several doors, etc. Builder could have built it that way as well, but it appears they went all out for a major value in use increase. That may not be the same as market value, but heck... Ever seen that movie with JackBlack & Stiller - ENVY? The dude built a mansion in front of his pals house. "Everyone told me I was crazy to build a mansion in the valley, but I wanted to stick to my roots"

Sounds like you're missing the equivalent of two whole sides (each interior sides) of framing and finishing and structural support.

Don't just run with reconversion, first you must perform the permisibility analysis. only when you can honestly claim its' not recreatable or permissible or present anywhere else in near or semi near semi comparable markets, can you present the opinion it must be restored.

You'll be accused of missing valuation if you subtract before you try to add. So you must prove the case of recreatable, permissible, commonality first. Call the zoning department correctly and the assessor. "I've got this house...." Don't tell on this one, because if it's not permissible, you'll get in hot water for sharing info. Find out if it is permissible first, then go from there.

If it is permissible, it can be considered an anomaly a market frankenstien that the right mad scientist would find more value in use. So maybe value is simply a combined value, and the added value in use would be offset by the tremendous longer marketing time to sell the unit?

Remember the basics, value in market, value in use, cost to cure, functionality.

Sounds like a tremendous home that someone would love to live in. But can someone just peruse down the road a few miles, and find a typical all single family larger home neighborhood? What is the locational factor that would drive someone to need to live right there? Or was it just a fluke? You see they get off combining condos because the substitutability factor is limited if not nill in certain markets, especially city where there is no more room to build out, and they instead started the trend of building up. What was that book called? The water tower, the water fall... About the first skyscraper in America.

You must opinion the value in use, the value in market, the offsets, the substitutability, the permisibility, the feasability, the commonality.

Yep, you've got an honest to god complex order. Love those orders, they're great learning experiences, no matter how experienced you are already. Have a good one, you're the appraiser, you make the call!

 

[Eric C]

cost to cure, remove pool, put back wall, build one new kitchen, demolish, file for permits, loss of use/carrying costs of unit during construction , rebuilt 2 new patios. Is the cost to cure the diff between value of two combined and the poss value of the 2 units separate?

From your desciption, the combined units sound awkward and super adequate and not well designed. However, you still don't know if there is a market for large combined or just large townhomes in area (or else just have not posted that part yet) Of course the exterior still looks like 2 sep units with 2 driveways...just as the ext of 2 combined condos will look the same, usually the HOA or condo assoc does not allow much ext change even though they might allow interior combos (in this case the builder did it before HOA existed, doubtful the HOA would have approved the pool )

No there are no large townhouses in the whole area. It is just not typical specially with 6 bedrooms and 4.5 bathrooms.

The closest thing that might compare in size would be a Coach-home but I have never considered coachhomes as townhouses.