Commercial Property: How to determine value?

Question

How would one go about getting a commercial property valuated/appraised for little to no money?

Ned Carey · Answer

There might be something in the FIlePlace under the resources tab above. 
To start:
Phase 1 Environmental
Copies of current leases
Estoppel letters ( letters form tenants claiming current terms)
Copies of all contracts for services (lawn care, trash hauling etc.)
Rent roll
Copies of tax returns
Property inspection
copies of any prior appraisals

Good luck - Ned

Karen Margrave · Answer

Sandra Ruiz Do you need an actual appraisal or are you just looking for something that gives you the value? There are websites that you can join that shows recent sales, etc. You can probably go on to a free MLS site, and do a search, choosing the option of "sold". LoopNet also has a membership for comps, etc.

Tom Goans · Answer

Sandra, I created a spreadsheet that is my check list when inspecting a real estate property.

Website:  ksce.biz/research/forms.htm

Sandra Ruiz · Answer

Ned Carey-- Thanks for the info. Is their some type of due diligence checklist out there for beginners?

Tom Goans-- Nope. Not shortcutting the research one bit. It's my first deal and it belongs to a close friend of mine so I want to make sure I do right by all parties involved.

Karen Margrave-- No. I phrased the question incorrectly. What I meant was how to go about getting the value without having to do the appraisal. Thanks for the information on how to get comps, though!

Tom Goans · Answer

When considering commercial property, the list is long as to what to what information to gather, what to consider, and what to personally inspect.

Considering a commercial property requires a lot of money commitment and deep pockets. Do NOT shortcut the research.

Ned Carey · Answer

Sandra Ruiz  you are not going to get a commercial property appraised cheaply. Commercial appraisals are much more expensive than SFH appraisals. You may be able to get a Brokers price opinion at a reasonable cost.

What you need to be able to do is learn to evaluate them yourself.  Commercial deals should always have a due diligence period which is basically a free look to evaluate the property and the numbers. Only when everything you can check yourself out basically for free do you start spending money on things like an appraisal. By the time you order the appraisal you should already have looked at the tax returns to see the numbers to know if there s a deal or not.

Commercial Property: How to determine value?

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