Today I came across one of the strangest properties I've seen in a while. It is 2 units in a midrise condo that are joined by the owner of each knocking down the wall inbetween. Now this I have seen before a couple times. What made this property odd was that each condo has a lien by a different bank. The first property (A) has the kitchen, a full bathroom, a bedroom and the living room. The second unit(B)they have removed the kitchen from, converted the full bath to only a half bath and then 2 more bedrooms. Somehow the borrower has built a room that is inbetween both rooms with the door in (B) but the majority of the room is in (A). Now the borrower has kept up payments on unit A but is defaulted on unit (B) so it is in forclosure. The HOA originally gave permission for the unit to be converted however now they do not want to give permission to have it converted back into two seperate units.

The client has specified on how they want it valued but I thought I'd reach out to you guys and see what your imput and opinion on this would be.

Also, I'd love to hear of some of the oddest properties you guys have ever had to value if you're willing to share.

J~

Whoa!
Man!
Wow!
My goodness what a mess.


Sorry all I can think is about the poor bubba who got the BPO.

I just thought it out...have the HOA buy it and convert it to a commerical spot, then franchise out a Starbucks. Bingo. Problem solved.

Did all this information regarding the subject come via an interior BPO? If so, then I feel it should be evaluated on what it is now. From what I am reading that means a 3/1.5 unit with the GLA being the combined square footage of the two units. It’s a non-conforming property for the building either way you evaluate it. It is what is now, so the bank(s) just needs to deal with it. It cannot be converted back from what it seems, so evaluating any other way isn't really an option IMHO.

Wow, this sounds like a BPO I did about 2 months ago on a property in L.A. It was a condo located in what was orinally a 4 unit building. 2 of the units were combined by knocking out a wall to make a 2 unit property. Now there are 3 condos in the building. Land use says condo but subject property says 2 units. It was hard to comp because the condo was now twice the size of typical condos in the area. That was a weird one.

I've done other BPO's where a SFR's was illegal converted into 3 and 4 units with walls and kitchens built. I dont like making adjustments for repairs to convert illegal units back to a SFR

The same borrower owns BOTH units, but only one is in default?

Correct, The borrower owns both units but I guess they bought them seperatly with two different lenders holding the note for each unit. Then they proceeded to knock the wall down inbetween and remodel. They are defaulting on one but the other one which is owned by a different lender they have not defaulted on as of yet.

Normally I would agree with Brad regarding comp it as it is and be done with it but since the bank only owns the one side and the other bank has the lien on the other side which hasn't defaulted as of yet...... it makes it a little tricky.

J~

Yes, it is tricky!

Compare the situation to an original 2BR/1BA/Kit/DR condo in default that a bank wants a value on. When the valuator gets there, he finds that the borrower has converted it to a 1-room communal sweat lodge with a commode and sink in the corner, and a hole in the roof to let out the steam. He wrecked the place. But, that's what the bank now has. That's what needs to be valuated.

Your situation isn't all that different. And the bank is correct, you can only value "their side". So, you start with the original GLA of the standalone unit and adjust for what's there, and what's not according to other similar GLA units. It should be valued according to how it is now configured (the room count and functionality of them) within the original GLA. It will not be good news for the bank. An opinion of repair costs to return it to its original functionality could also be useful.

Brilliant!!!!!

I would tend to write it up based on the side the current lender owns and then adjust to correct the deficiencies. Those deficiencies being clouded title, functional utility, and corrective repairs (conversion back to a single unit) and the legal costs to address the issues. The cost of correcting all these issues could well result in a negative value.

I had to do that on some Condominiums recently where they had built 16' too close to the property line; couldn't get a Certificate of Occupancy, were cited for Zoning Violations; ran out of Appeals; and were then subjected to a Tear Down Order. Now the Mortgagee is trying to sell it "as is" with the prospective Buyer picking up the pieces.

I don't like to estimate legal costs; but I threw in a figure of $75,000 to $100,000 for corrective (retro-active?) Permitting; property line adjustment/land acquisition/swapping; Survey revisions; revised Septic Design and Engineering; et cetera; along with some Legal Expenses . . . . and the Client then asked whether I shouldn't maybe double that? I said I could; but it may be a whole lot worse than that. The Market has a way of speaking for itself, and this $949,000 building can't even be unloaded for $250,000 because of the uncertainty. The Market hates uncertainty.

Don't legal expenses always vary greatly as a function of "who's paying" ?

Along with Vermont, this is more of a legal issue than anything else. IMO this should not involve the mill, the BPO agent hired to do the report or you as a QCer. The property is what it is now, and should be evaluated as such. The lender who is currently being defaulted on will need to tackle all this with their legal department, which I feel should not be factored in the report.

Just my $0.02.........

[Also, I'd love to hear of some of the oddest properties you guys have ever had to value if you're willing to share.

J~[/quote]


I just had a 900 sq ft cottage that had 5 non permitted additions. 2 extra bathrooms and 3 rooms plus a non permitted carport conversion. Only used similiar 900 sq ft comps but then again they have added another 1000 sq ft but it couldn't be counted.

We have alot of FEP's here that do not count as additional base. I bet the HO never realized when paying for the additions that the slab and roof needs to match.

As far as the BPO that you are reviewing J, I would think that qualifies for an appraisal.

I'll double that to 4cents.
Since when are we supposed to provide the Seller's Net Sheet on a BPO? The price is the price and if the seller loses money on that price, so be it.

We had an REO that was a mobile home built in the late 60's that was the interior base of a house built (cobbled one room at a time) around it.

The kitchen was the kitchen from the mobile home and everything had been cobbled around it. When we took rear photos you could see the tail lights of the mobile home sticking out of one rear wall.

Oh, They also put a screened pool in and it had a seperate 20X40 foot lot for water access about 4 blocks away. Unfortunately it had not been maintained so the access was blocked by a protected species of tree (mangroves) that could not be cut down so it was worthless.

Even more surprising it sold in about 5 days.

Grampa - you are just trying to get people to laugh!!! That can not be true! The tail lights were sticking out of the back wall and it sold in 5 days?? No way. I bet you just jumped for joy the first time you walked around that one and thought to yourself - yep - this is my new listing.
As far as the condo - I am all for the Starbucks - but how about you call the bank that owns the other side - not in default yet - but I am sure it will be soon - and sell the defaulted side to them? The way I look at it - they are a built in buyer.

I've spent a lot of time - months and months - in Grampa's area, and I completely believe him.

Better yet due to it's proximity to the water is was within 5 blocks of some Million+$ homes on a gated island. The locals used to use the island as their own private fishing camp before it was developed. You actually have to drive through a bunch of mobile homes to get to the gate on the island. The person who owned the mobile right next to the gate painted their mobile bright purple and pink out of protest. It is a particularly unique area. It is called Nokomis. Before the high dollar properties were built there was an old joke. "No Shirt, No Shoes, No Teeth, NOKOMIS". Too weird to make up.

^^lol that's funny!

I've never wanted to live in a mobile home before until I saw the ones on the water over at Marker4 in Venice.

The mobile home is funny. A couple years ago I had a two story mobile home come across my desk. It was located in Happy Jack, AZ. The owner had taken 1 single wide and bricked it in and then placed a second mobile home ontop. The stairs was a ladder with basically a hole cut into the upper story. Looked like a regular 2 story (Although very narrow) on the outside but you got into it and was deffinatly a mobile home. J~

I can't explain this "home" except to say that it was a mobile surrounded by a sitebuilt.

There were two walls on all sides with space between them, and you had to go through two doorways close to each other to get in. It wasn't an add-on but an add-around. You could look out two windows, one in front of the other. Well, actually you couldn't really see too well out of the outer windows because over time dust, dirt and other yucky stuff had built up between the walls of the mobile and the walls of the outer structure. Spider webs and such. People were living in there. In a way. Very strange people.

I hear you. Have you been to Marker4 since it was spruced up?

I chuckle everytime I see a listing that is a Mobile home, on Sailboat water, with Direct Gulf access. Those oldsters keep them up as well. Might have been built in the 80's but looks like it was brand new. I have seen some where they have put in granite countertops in the kitchen and baths.

We get both ends of the spectrum. We had one listing off the water that was a 12X48 mobile that the preservation company actually filled a roll off dumpster (one of the big ones) full to the top cleaning out.

I would totally live in one of those mobile homes there. Location location, baybay, and they got that. How much do they sell for?

I haven't seen Marker4's remodel but I ought to get back soon mmmm margaritas and grouper sandwiches mmmm and Captain Eddys' too mmm.

Copy that Artiste.

But seeing as it is 5 o'clock somewhere and the discussion is about mobile homes in Fla. these JB lyrics came to mind.

I do not remember the name of the song....

Mobile homes they smother the keys
I hate those bastards so much
I wish a summer squall would blow them all
The way up to fantasy land
They're ugly and square, they don't belong here
They looked a lot better as beer cans

There are currently 5 listed between $85K & $265K depending on if they are directly on the water or interior with deeded slip. 1 Pending interior for $90K. Only 1 sold in the past year about 9 months ago for full list of $114,700.

I hear you on those grouper sammies and the only place I ever want to see ice again for the rest of my life is in a margareta.

Off Topic:

I have a good charter Capt. that we go out with. Next trip is the 29th (a rare day off) We always limit out on everything that is in season. Snapper, grouper, AJs etc. He will even play with the occasional Goliath Grouper (Formerly known as a Jewfish) in the 150 - 500 Lb range after we have limited out. It is illegal to even take them out of the water but it is a good way to waste an hour or so once you have limited out.

They were almost wiped out because they tast as good at 500+ lbs as they do at 20 lbs. You could fill a freezer with one fish so they had to make possession illegal so they can recover which they are doing nicely. A success story for an endangered species. So much so that DNR is actually talking about selling tags so you can take 1 fish which they will sell off lottery style. However, I do not think it will happen for another few years.

The Jimmy Buffet Song you were thinking of is called "Migration"

Lookin back at my background tryin' to
figure out how I ever got here.
Some things are stil a mystery to me
While others are much to clear.
I'm just livin' in the sunshine,
Stay contented most of the time.
Yeah, listenin to Murphy, Walker and Willis,
Sing me their Texas rhymes.


Now most of the people who retire in Florida
are wrinkled and they lean on a crutch.
And mobile homes are smotherin' my keys;
Well I hate those bastards so much.
I wish a summer squall would blow them
all the way up to fantasy land.
They're ugly and square, they don't belong here.
They look a lot better as beer cans.


[Chorus:]
Yeah, That's why it's still a mystery to me,
Why some people live like they do.
So many nice things happening out there,
Never even seen the clues.
Whoa, but we're doin' fine, we can travel and rhyme.
I know we've been doing our part.
Got a Caribbean soul I can barely control
and some Texas hidden here in my heart.


Well now, I might have joined the merchant marine,
If I hadn't learned how to sing.
And on top of that I got married too early,
And it cost me much more than a ring.
But those crazy days are over,
You've just got to learn from
the wrong things you've done.
I came off the rebound, started looking around,
Figured out it's time to have a little fun.


[Chorus]


Well now, if I ever live to be an old man,
I'm gonna sail down to Martinique.
I'm gonna buy me a sweat stained Bogart suit
and an African parakeet.
And then I'll sit him on my shoulder
and open up my trusty old mind.
I'm gonna teach him how to fuss,
Teach him how to cuss,
And pull the cork out of a bottle of wine.


[Chorus]


Yeah, I got a Caribbean soul I can barely control
and some Texas hidden here in my heart.

So today's oddball property is a 6 unit SRO (illegally converted) in NY. I now know more about Single Room occupancy buildings in NY and rental laws than I ever wanted to know. I didn't even know we had these in the states but I guess we do.

J~

I would decline the order and tell them to get an appraiser- I don't think that we are qualified to render an opinion on a botch job like that, I tink it is outside the SCOPE of a real estate agent- don't tell me that you're willing to do this for a misely BPO fee??? I can think of many other things to do with my time!!! NO PUN intended-- it makes no sense- DECLINE the order, let them tackle it

I got one late on Friday that was a house on a 100 acre farm. Luckily the mill was still open so I called and told them to check with the client. Also told them that if the client wants it to go ahead, I'll decline the order. I haven't got 2 or 3 hours to waste trying to find comps that fit in the little pigeonholes these clients have created.

I can't decline it since I am 'Them' lol. Wish I could but I can't... Todays oddball. It's a gas station/residence/petting zoo. I'm still not sure what to classify it as it could be commercial or farmland I guess as it's on 11 acres with a barn and corn crops. Ah mixed use properties...gotta love them.

J~