All Forum Posts by: N M Clarke

Hi Nuo, Thanks for prompt response. I looked and under that section this was the comment:

"Due to the difficulty is accurately determining accrued depreciation of a complex of the subject's age and due to the limited availability of recent vacant land sales in the immediate submarket, the Cost Approach was deemed to be a very weak indicator for value for the subject, thus is was excluded from this analysis. Per lender request, an "Insurable Value" estimate has been provided herein. The above cost estimates were taken from the Marshall Swiftestimator Cost Service -- Avg+ Quality, Class D."

The insurable value is very low, so that really doesn't help. I'm surprised as this property is in San Francisco county...maybe because the appraiser was in Fairfield, CA and isn't familiar with SF?

Any feedback greatly appreciated.

I've also had the same issue from county reassessment with a property purchase in 2020. I can't seem to find the ratio from the appraisal prepared for the lender, so don't have another ratio to use.

Does anyone have any recommendations for on how to get a more realistic ratio for backup in case of audit? Should I ask the appraiser who prepared the report to put a ratio on it? From an income approach, with rent reductions etc and now 1 vacancy in this multi-family, I would also think that the value has gone done?

Any ideas/appraisers greatly welcomed...

Thanks, Bruce. You're a rock star. Appreciate looking at a few comps. I'll have to figure out how to just finish my taxes for 2020, and see what ratio the CPA says and then follow up with the Assessor.

I was shocked though when I received the reassessment. Closed in Oct 2020; Purchase price was $2.5M for 5-units and the land was valued at $1.75M and building for 750K. How would I ever be able to replace 5 units in San Francisco for only 750K??? Rental reductions kicked in after close so on an income basis appraisal, i don't see how it would be valued at purchase price, temporarily anwyay.

Bruce: Thanks for the tip. I reached out but the thing is that they have a customer service type number and you can't get to an actual assessor. The customer service people in the assessor's office just read off the script and tell you that you can appeal via online, etc. This isn't helped by the fact that I'm temporarily trapped outside of the country due to COVID travel restrictions and are not on an easy time zone with SFO.

I guess my question to the forum is if land is now typically valued at 70%? I read somewhere that the average in SF is 50% but not sure how that figure was calculated. Does anyone have a recent reassessment in Bay Area, given the high purchase prices, that place land at such a premium???

Bruce -- what about contesting the assessment of land vs structure? I recently purchased a property in San Francisco, and it came in 70% land to 30% structure, flipped from the previous long time owner's 30% land to 70% structure. The 30% structure ratio doesn't cover cost of replacement of structure/building and really limits my depreciation. Any advise greatly appreciated.

How long do you think rents will continue to fall? At least we've gotten past the election uncertainties (prop 21, 15), Biden vs Trump, and multiple vaccines on the way, though the current COVID spike and increased restrictions aren't helping.

Hi Amber. It's basically a straightforward LLC with assets held in trust for the beneficiaries. They are commonly used in estate planning and your attorney will be very familiar with them. PM me if you have any specific questions -- can't say that I am expert or offer legal advice but can speak generally.

@Theresa Harris

Thanks Theresa. Alas, he was at market rate and now the market rents have gone down.

@Jon Schwartz

This was from an attorney specialized in the local market. Not 100 pct sure if accurate and hard to find true info out there.

@Adam Martin

Thanks for weighing In. Good points. I’m resigned to offering a reduction but just not sure how best to structure it. With rent control increases only +2.2 pct without other pass throughs it will take years to get back.