All Forum Posts by: Carolyn Yates

As the others have mentioned, you need to check zoning or planning to make sure that it is allowed. If you are zoned for single-family residential then probably not, but the different zoning districts allowed various levels of density. Also, the SFR zone may allow an ADU. I would start with city hall.

Unless the seller is worried about the property not appraising for contracted the sales price, they most likely will not have a preference to cash over conventional financing.  Certainly, every seller is different, so it's good that you have options.  North Carolina is a great state.  I hope you enjoy it there.  I lived in the Raleigh area for a number of years and spent quite a bit of time at the coast near Wilmington.  Lots of fun places to visit and what a great place to live!

Like @Josh Green said, they are very similar markets. The MLS doesn't break down their stats by city, but they do provide the following county statistics. These are the latest stats (August 2022): Pinellas County (includes Gulfport and St. Petersburg) 100% list to sell with an average sales price of $466,618 year to date and 0.21 months of inventory on average for the year. Greater Tampa also has a 100% list to sale and average sales price of $447,621 with 0.31 average months of inventory. The markets are cooling some with August figures for Pinellas county of 98% list to sell and 1.8 months of inventory. Tampa saw 99% list to sell with 2.6 months of inventory. The average sales prices were nearly unchanged. The info that I found on the appreciation rates indicates an appreciation rate of 6.22% per year on average since 2000 for St. Petersburg and 6.02% for Tampa. I hope that helps!

Private or hard money lenders will often take an evaluation and it can be completed in a shorter time frame.  It is not uncommon to have a 7 day turn around for those.

As an appraiser, I would choose to stay closer to the subject and adjust even if the sales are a little older.  However, in this market using older sales may not be the best indicator of value.  The appraiser should be using the best sales available.  I don't know the market that your subject is located in, but one mile in a metro area would be a great distance, but in some suburban markets would be completely reasonable.  If there are better comps available there is nothing wrong with presenting them to the appraiser.

If the numbers don't work then I would move on.  In an apartment where the tenants rent by the room, the landlord's utilities are most likely higher as they most likely cover the electricity, cable, water, garbage, etc.  I would just be upfront with the seller and say at the price they are asking the numbers do not work for you, but you would be interested in the deal at $X value.  Maybe the seller would be able to offer some seller financing to make the offer more attractive to you.  When doing your calculations, don't forget to consider vacancies and reserves for future expenses.  

The Raleigh market has seen such appreciation.  No one has a crystal ball, but if prices should fall it may be difficult to sell your investment and the negative cash flow may make it less attractive to hold onto long term.

Yes, anything over 4 units would require a commercial appraisal.  However, if the value is below a certain threshold the bank may not require an appraisal or could even accept an evaluation which is typically lower priced and less comprehensive.  As previously mentioned, the bank does need to be the one to order the appraisal if it is for lending puporses.  They cannot accept an appraiser previously ordered by the property owner.  

But when are evaluations a prudent choice for financial institutions?

First, qualifications must be met. Under federal regulations, institutions may obtain an evaluation of real property collateral in lieu of an appraisal for certain transaction types:

• Commercial real estate-related financial transactions in which the transaction value (generally the loan amount) is $500,000 or less.
• Certain renewals, refinances or other transactions involving existing extensions of credit, provided there has been no material change in the market conditions affecting the real property’s adequacy as collateral and there is no advancement of new money other than funds necessary to cover closing costs.
• Real estate-secured business loans of $1 million or less in which rental income from the property or income from the sale of the property is not the primary source of repayment for the loan.

Hey Dustin,  I am in SW Florida and glad to connect.

Congratulations!