[Timely: appeal deadline Monday Nov 18 2024 - need to submit by Friday 15th - tomorrow]

The Property: I own a 4 plex in Seattle (magnolia) Washington bought in 2014. While it is legally a fourplex on a single lot, there are technically two buildings, a two story duplex and a side by side duplex with a walkway between them. One building was a 1920 house remodeled in 2012 and the second building was newly built by a contractor in 2012/2013. At the time, all work was done with permits and signed off by the city. I purchased the project mid flow for a discount and completed it with the builder.

The Appraisal: The 2025 property tax appraisal we received went from 1.66M to 2.43M (46.4% increase). I own a similarly sized 4-plex on the same street two blocks away whose appraisal dropped from 1.674M to 1.434M (14.3%) for 2025. All my other multifamily in the area went down between 6 - 15% for 2025. When I finally got feedback from the appraiser, it turns out they walked the property and decided it's not a fourplex, rather the "highest and best use" is a duplex and two townhouses. As such, they handed the lot over to the residential division instead of the commercial division, who then ran their own formulas. 

Ask 1 / Examples for Building our Case: I am formaluting my argument for the appeal and can use any and all advice. The deadline to submit an appeal is end of week. After discussing with the appraiser, their perspective is that the main argument I can make is by providing sales comps which demonstrate their value is out of line with the market. Which I will do of course. My concern is that I disagree with the methodology, and could use advice / specific use cases to build a convincing argument for the review board that you can't redefine use until it has been done.

It's a single lot. I have never performed a lot-split, nor did the builder. It was not my intention to do so, although I can see the value should we ever decide to sell. I totally understand that the theoretical highest and best use could be a duplex + two townhouses. And I am even on board with the idea that the value of the lot would be much higher if it was 3 lots. After all, more buyers and a bigger market, less worries about cashflow. BUT IT IS NOT THREE LOTS. They want to tax me on something which doesn't exist. And when I specifically asked if this tax valuation would guarantee me a lot split, they said it would not, and that is a city decision. It would be like charging you for a full remodel property rather than a hovel, because its highest and best use would be a swanky modern house despite never having upgraded it.

Ask 2 / Costs & Risk Involved: I need to calculate the impact of what a lot split would entail. I know thinking about what a lot split involves, but not in a strange scenario where the properties have been built since 2012, and we are just trying to adjust their lot / use. I need to know the avg cost involved more or less so that I might add that to my argument. King county is not a cheap place to operate. Are we talking 10k for some hand waiving and reviews, 30-40k for the engineering reports / planning and submission, or 100k or more. Any architects / planners with knowledge, I would be grateful for you 2c. OR if you know someone who would take a call today and chat it out for 15 minutes. Unfortunately, on a deadline.

Also what other expenses / impacts do I need to consider? I imagine a lot split would also significantly increase cost of utilities as now I would have 3 hookups in that scenario.

I am also concerned what would happen to that sweet 3.25% 30 year fixed mortgage I have, which I don't want to create any risk over in the slightest.

Any advice on how to frame my counter arguments would be incredibly appreciated. Thanks friends.