Notes

Slide Show

Outline

1	The Income Approach is Your Friend The applicability of the Income Approach to Single Family Appraisal
2	Subject Property – River Street Holderness
3
4	Comparable Sale 1 – Wentworth St., Plymouth
5	Comparable Sale 2 – Fairgrounds Rd., Plymouth
6	Comparable Sale 3 – Merrimack St., Bristol
7	Sales Comparison Approach
8	Income Approach
9	Final Reconciliation
10	Appraising a Two Family
11	Sale 1
12	Sale 2
13	Sale 3
14	Preliminary Reconciliation
15	Sales Comparison Approach
16	Adjust Comparable Rents Calculate GRM
17	Consider Subject Rent Estimates
18	Final Comments Adjust rents to subject’s expense program when calculating GRM. Consider projected rents when estimating the subject’s gross monthly rent.
19	Life Estates Assume that the River Street assignment is for an estate. The deceased gave his spouse a 1-year life estate with the reversion going to his children. The spouse is responsible for all expenses related to the property during the 1-year life estate. You need to estimate a discount rate and make an assumption regarding changes in value over time
20	Discount Rate Estimate 1.Estimate the capitalization rate 2. Calculate the discount rate
21	Capitalization Rate
22	Calculate the Discount Rate
23	Value of Life Estate
24	Quick Sale Value The assumption is that a buyer can make a profit with the purchase of the property at foreclosure. This profit is comparable to a developer’s profit.
25	Calculation of Quick Sale Value for River Street Assume a developer or investor’s profit of 15% of the eventual sale price. Assume marketing costs of 7% of the eventual sale price Assume a 1-year marketing time.
26	Calculation of Quick Sale Value