You will appraise an 8-unit apartment complex in Northridge, CA as though you are an appraiser, with the attached comparables below “Comps Sales Within 4 Miles and 3 Years” PART 1 AND PART 2. Your client is the owner of the subject property, who wants to know the market value of his property before putting it up for sale. For this project we are focusing on the sales comparison approach.
SALES COMPARISON APPROACH
- Explain to your client what this approach is about. What are the steps in this approach?
- What comparable properties do you select? How do you determine that these properties are comparable to your subject property? (MUST CHOOSE MINIMUM OF 4 PROPERTIES) Would like around 4-6 properties used.
- Please show a map of the comparable properties and the subject property.
- What are the detailed characteristics of the comparable properties? Which main characteristics do you use to compare to your subject property?
- Create a “Sales Adjustment (or Comparison) Grid” (attached below). What criteria/elements do you use to adjust? How much adjustment? What is the rationale behind choosing the value of adjustment for each criterion? Make sure to cite sources if used to find data for certain adjustments.
- Reconciliation: How do you reconcile all the final adjusted sale prices of the comparable properties? Which weight (%) do you use for each comp? Why? What is the final “indicated opinion of value” based on the Sales Comp Approach?
- Conclusion: Please write a paragraph about your conclusion of this section.
For examples of the Sales Comparison Approach section in appraisal reports, see pages 57-78 of the PDF document “Sample appraisal report_commercial”, or see pages 31-36 of the PDF document “Sample appraisal report_multifamily” attached below.
SPECIFICATIONS/FORMATTING:
All written assignments are required to be submitted individually, using Microsoft Word. Documents should be proofread to avoid spelling and grammatical mistakes. Additionally, all written assignments will be evaluated based on quality and not simply quantity. All written assignments should adhere to the following guidelines:
Word document with 1-inch margins on all sides, Times New Roman 12-point font. There is no page limit. Graphs, charts, tables, and images are highly encouraged. Please copy any tables and graphs made in Excel to your Word-doc appraisal report. You don’t have to submit your Excel file(s), but you can if you choose to.
Before presenting the main section of Sales Comp Approach, include a Title Page and an Executive Summary Page (a summary about the subject property and a summary of what you have done in this section).
Documentation for all references and quotations should be in APA-7th edition style.
THE CASE STUDY SCOPE:
The subject property is located at 18320 Napa Street, Northridge, CA 91325 and consists of a two-story apartment building constructed in 1959. Census Tract No. is 1154.02. The assessor’s Parcel Number is 2786-024-047. The property totals 8 units and a gross building area of 5,473 square feet. The unit mix consists of 3 one-bedroom/one-bath units and 5 two-bedroom/two-bath units. There are 7 on-site parking spaces or 0.88 spaces per unit. The improvements are situated on a 7,006-square-foot site. The improvements are in average condition. The property was 100% occupied.
-SITE COMMENTS: The subject parcel is an interior site that is gently sloping; utility is estimated at 95%. The site fronts a two-lane residential artery with industrial uses beyond (see photo) and sides/backs to similar density residential uses. Napa Street is composed of residential uses on the south (subject) side and an industrial sector on the north side. Adverse impact on marketability/rents judged moderate. Access to the parking is via a common driveway on the west side of the structure; the Owner reported that this is an easement. The subject site appears to have been subdivided from an original six-structure complex; all six buildings are the same. A filled pool is located in the center courtyard. The access driveway extends through to Malden Street. Pedestrian access is via a shared (with 18314 Napa) security gate. On-site parking consists of five tucked-under carports on the west side and two open spaces at the rear. Hardscape items: areas of displaced concrete walkways in the central courtyard noted; front landscape maintenance deferred. Off-site parking is available on Napa St.
-IMPROVEMENT(S) COMMENTS: The improvements consist of a two-story structure of eight units with tuck-under carports constructed in 1959-(per both Public Records and L.A. County Assessors Office.). The following items were noted at the time of inspection and/or reported by the property Owner and are reflected in the overall condition/effective age ratings and the projected maintenance expenses: exterior stucco, wood fascia, and paint in average condition; Owner reported flat roof as about 25 years old no interior issues on second floor noted; windows are original sliding metal units and 14 updated vinyl units; electrical service is circuit breaker protected with 15-20-amp. sub-panels; central water heater replaced August 2008; Owner reports plumbing has been updated with copper pipes throughout; major interior components (kitchen/bath/heating) of units are effectively original with cosmetic updates-(the 3 two-bedroom units have updated kitchens with new cabinets, granite counters, sink, and appliances; flooring in units in average overall condition; seven toilets replaced in 2009. Foundation strapped to framing subsequent to the 1994 earthquake. Common areas (yards/parking) exhibit average overall maintenance. Units are individually metered for electric service and gas service. Functional issues: None noted. Utilities paid by owner: Water and trash only. The first floor consists of Unit #1, Unit #2, Unit #3, and Unit #4 with 5 carport spaces adjacent to Units #2, 3, and 4. The 2nd floor consists of Unit #5, Unit #6, Unit #7, and Unit #8 via a staircase between Unit #1 and Unit #2. Gross Building Area: 5,473 square feet. Net Rentable Area: 5,413 square feet. Laundry Area: 60 square feet which generates approximately $100 per month.
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