All Forum Posts by: Bill Keast

@Scott Anderson we should chat!

How big is the property?

On the appraisal we side we see this happen often, especially in NY state the percentage of communities that do annual revaluations is super low. Most municipalities don’t have the capacity to do annual revals, and some wait many years. I would check with the town assessor to see if a sale will trigger a reval on properties. Also google “your county or town name and real property” you should be able to pull up the county or town tax records and hopefully they have a search component and you can bring up other nearby duplex properties to see if they are also similarly assessed.

Speaking from the appraisal side yes PM is an operating expense. We also include reserves as an expense as this is how the appraisal side and lenders view it. I would say it is split 50/50 on owners providing us their proforma statements whether they include replacement reserves or not, but I feel it has been trending upwards seeing it. I would say also similar that 50/50 brokers include reserves in their listing proformas.

As a commercial appraiser we ask for 3 years P&L, year to date financials and a proforma for the current year or following year. Most “professional” owners are great about this; however I routinely run into less professional owners who ask why I need historical numbers and why not just use their proforma numbers. Which by the way they casually forget to deduct vacancy, management fees, reserves, etc. Often with these type of owners I also get the “well we take care of all the repairs and maintenance so we won’t have any of that expense”, good for you but we appraise based on what the market is for operating expenses and the lender does too! I also see far too often owners cranking up the “other income” which can be quite mysterious and often not supported. Just ran across a job where a property was under contract and the seller took their sweet time providing historical P&L documents and I realized why— they had very low reported income shown on their taxes — taking cash payments... etc. So 3 years, a T-12 are best things to get. And make sure to analyze each year to make sure I goofy expenses like cap ex included in the repairs line or personal expenses, etc.

Hey Everybody-

I have been lurking in the background of BP for a while, and thought I would do an intro.  I am a state licensed commercial appraiser from Syracuse, NY and have been appraising for over 10 years now.  I work for a national appraisal firm and appraise everything from simple 2-4 unit properties to complex mixed-use assignments. I have appraised all types of property-- vacant land, small/medium multi-family, large multi-family 200 to 1,000 units; student housing, new construction, hotels/motels, RV parks, office/industrial/retail, shopping centers, special use, etc. I routinely work with financial statements from these properties and wonder why I am not doing this!

I have a 5 unit multi-fam in a suburb of Syracuse and am ready to branch out and pursue larger multi-fam and mobile home parks.  Would love to connect with other Upstate NY folks sharing similar goals. 

Thanks!

Bill