When is zero effective age justified?

[spittman]

If roof, windows, ext walls etc are sound and it is the interior that is stripped down to Sheetrock/drywall, most investor buyers would finish the rehab rather than demolish ( at least from what I have seen in my area)

That's what I was thinking. One of the problems I was having is that I couldn't find a single comparable like my Subject. Even the distressed sales were in average to good condition. I did find a home not too far that was a complete loss from fire damage. That one I now understand might be zero remaining economic life since they chose to demolish it and are currently rebuilding. That's what got me to reconsider that my Subject Property does have some remaining economic life. It's on a slab with no visible signs of settlement. 90% brick, but will need exterior paint on the wood surfaces and caulking. Roof looks ok, but I did notice a couple of water stains in the attic and previous repairs. Most of the sheetrock is done but no paint. All flooring needs to be replaced. The kitchen sink is there, but they might as well replace the whole thing including the counter. No other cabinets or counters. No shower in one of the bathrooms, but a sink in place. Vice versa for the other bathroom. Central AC/heat works fine, but equipment looks out of date. They also halfway converted garage to living area and connected to HVAC. There's more, but those are the major things.

Initially I rated my Subject a C6, but while comparing it to the fire destroyed property I realized there is no lower rating so I rated the comparable C6 and changed the Subject to C5 and spread the adjustments for Quality, Condition and Functional Utility. Is this correct?

 

[Mr Rex]

That's what I was thinking. One of the problems I was having is that I couldn't find a single comparable like my Subject. Even the distressed sales were in average to good condition. I did find a home not too far that was a complete loss from fire damage. That one I now understand might be zero remaining economic life since they chose to demolish it and are currently rebuilding. That's what got me to reconsider that my Subject Property does have some remaining economic life. It's on a slab with no visible signs of settlement. 90% brick, but will need exterior paint on the wood surfaces and caulking. Roof looks ok, but I did notice a couple of water stains in the attic and previous repairs. Most of the sheetrock is done but no paint. All flooring needs to be replaced. The kitchen sink is there, but they might as well replace the whole thing including the counter. No other cabinets or counters. No shower in one of the bathrooms, but a sink in place. Vice versa for the other bathroom. Central AC/heat works fine, but equipment looks out of date. They also halfway converted garage to living area and connected to HVAC. There's more, but those are the major things.

Initially I rated my Subject a C6, but while comparing it to the fire destroyed property I realized there is no lower rating so I rated the comparable C6 and changed the Subject to C5 and spread the adjustments for Quality, Condition and Functional Utility. Is this correct?

In Fannie land, C5 can be done as is. In your case, I don't think you can provide an as is value, so call it C6 with a C2C. There is an investor out there that will buy it in its as is condition, but he/she would not meet the predefined market value definition of a typical buyer. I think that's where Fannies C5/C6 protocol comes from. MHO

 

[J Grant]

It sounds more like a C5 than a C6 ...as C6 denotes serious hazardous conditions and repairs, whereas your subject is very dated in parts and needs finishing with sections missing, such as kitchens and baths. It needs completion more than repair of serious defects

I would not use fire damaged house torn down as a comp. Find very dated sales that needed rehab as comps...often they tear out the kitchens and baths of those houses so the fact that the house had a kitchen and baths did not mean much (to an investor or builder who is going to remove it anyway)

if any have been rehabbed/renovated and flipped, you can see original sale photos and after renovation phtoos, call agents etc see if they tore out the kitchens and baths, which would make those dated houses similar to your subject thiout seeing it )

 

[SutnNC]

Go back over a year+ and expand your search area, you'll find something.