Appraisal Matters

It occurred to me while I was replying to a comment on my “Marina Unit of Measure Fallacy” blog that price per slip is even more potentially misleading than the items I itemize. When does the price per slip not apply?
When the purchaser wants to use the site differently (condo development or new boat dealership), [...]

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During the past few years of explosive growth, the highest and best use for marinas very often was NOT as a marina.  Many traditional marinas changed to mixed use or condominium developments, especially in the southeast.  Now that that the real estate bubble has burst, development is often not the highest and best use of [...]

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When functional obsolescence is present at a marina, it is usually one of two types:  Those that affect the marketability and value of the marina (which I call supply-side obsolescence) and those that are recognized by boaters (demand-side obsolescence; again my term).
From marina surveys I’ve recently performed, there is a clear and almost universal pattern [...]

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The Fed’s Beige Book has some dismal information.  In our back yard (VA,DC,MD) things were stable, but we are starting to see a slip again since no one is loaning on new projects.  This is stagnating the commercial real estate market.
An excerpt on our home region:
5th District: Maryland, Virginia, North Carolina, South Carolina, southern West [...]

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Many marinas are feeling some effects from the current “recession”.  Third-tier marinas, those in rural locations (defined as not within walking or biking distance of a town or city with a variety of things for boaters to do) are affected the most… by far.  Here are some trends I’m seeing from our marina surveys:

Vacancy rates [...]

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In my continuing obsession with appraisal/lending issues given the bank shakeouts that will occur over the next 12-18 months, here’s an email conversation with IndyMac on an appraisal assignment occurred in late May with my appraisal firm Miller Samuel.
The report was ordered with a specific inspection date needed. Up until then, our turn time was [...]

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My definition of an expert in any field is a person who knows enough about what’s really going on to be scared.
- PJ Plauger
Eileen Simpson

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You’ve got to read this article.  http://www.financialweek.com/apps/pbcs.dll/article?AID=/20080714/REG/436047405
Eileen Simpson
True??? For appraisers it would be great for business but I hope this does not happen for the Country.  Should we be surprised?  Appraisers saw this coming at least 18 months ago, if not longer

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The ability to verify data is becoming harder and harder.  As appraisers, we must verify sale, capitalization rates and comparable rentals with one of the market participants.  This is becoming harder every day for many reasons:

Since many transactions are represented by Realtors, we rely upon them for data.  Many who were in the business have [...]

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Most people believe that the days of “cheap gas” are over.  Some of the reasons include demand from China and other developing nations, the perception that the oil reserves in the Middle East are running out and an increasing dependence on foreign oil, to name just a few.
High fuel prices are causing difficulties for some [...]

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Eileen and I have been extracting cap rates and operating expense ratios from sales for almost a decade and a half together.  During that time, I’ve reviewed an untold number of marina appraisals and have spoken with dozens and dozens of lenders and appraisers about the same thing - the operating expense ratio.  It’s time [...]

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I’ve worked with John for 13 years and although I am an appraiser, for marinas I am a data gatherer and general muse for him.  I’m also the one that begs and pleads for data in a market that is very closed to providing income information.
Over the years we’ve come across tons of marinas that [...]

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Over the past month, we’ve gotten a huge number of bid requests for marina appraisals all over the country.  I inspected a marina yesterday that typifies the problem.
Marinas are facing top-down and bottom-up pressure that’s squeezing profitability.  From the top-down perspective, the reduction in slip demand is causing higher vacancies in many marinas.  Many marina [...]

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The effect of the recession has highlighted how much retail owners and purchasers have relied upon steady or annually improving rents, cash flows and projections. Perhaps it’s not possible to completely prepare for a change in future market conditions, but not adapting to them when making financial decisions can crush cash flow. This two-part blog [...]

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My friends and family are constantly amazed by the interesting things I see in the field.  Now, most of the time, inspections go off well and nothing unusual happens.  The following is a list of some of my most memorable inspections.  Many I cannot print.

Dead body found in the basement of an apartment building;
An alleged [...]

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“Past performance may not be indicative of future results. Then why is it OK for an appraiser to assume as much?  And if every appraisal used this declining market logic in determining value, how would our market or any market reverse course”
This whole sentence indicates why there is a problem right now.  Some otherwise fine people [...]

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This post makes me wonder about the whole “Dummies” Series that I have used to learn new things all the time.  I can’t believe they put this in writing!  Below is the post from a wonderful blog called the Soapbox.  The direct link is: http://soapbox.millersamuel.com/?p=398
Eileen
Commercial Grade is a post by John Cicero, MAI who provides [...]

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I have to admit that the whole mess on the residential side has been interesting to me, but has not impacted our firm because we no longer do residential appraisals.  The problem with appraiser independence is still a problem on our side too.
Our best mortgage clients are ones where we have NO contact with the [...]

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Conclusion

There are many decisions that need to be made for a successful tax appeal. The tax savings can be substantial. Conversely, the opportunity cost of a tax appeal that is lost due to one or more of the pitfalls outlined in this paper can be just as dramatic. When multiplied by a portfolio of [...]

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Key 9 – The Presentation

When it comes time to argue a case, you will often be faced with a time limit. Other tax appeals are scheduled for that day and if you run over, you may not be permitted to continue. You want to have the key points stressed and presented in an [...]

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Key 9 – The Quality of the Appraisal Report

In some jurisdictions, the appraisal report is not read prior to presenting the case; in others it is always read. Most State Court judges read the appraisal whereas many board level officials do not. If the appraisal is of a high caliber, is easy to read [...]

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