All Forum Posts by: Clint Dorris

Regarding comps and cash flow. Everyone above has stated solid information. But, it's important to remember that cap rates don't come out of thin air. I'm a residential appraiser, but it should be noted that cap rates come from the market. In other words, cap rates come from the numbers of other similar properties aka comps. So while a cash flow analysis will be performed on a commercial property, those rates and figures should be derived from the comps, or at least of database of similar properties.

Also, it's great to say that the numbers work, so the deal works for your model. But, what if good investors in that area are buying properties for $50,000 less than "your numbers" that work? I think that is important to know.

I'm a residential appraiser, and I love it. But, like anything else, it has its terrible parts. One is, I have no residual income. Kind of make you want to invest.

The average appraiser income is somewhere around 60K. Of course, there are people who make way more and way less.

The main down side, as mentioned in the link above, is the time requirement. You must apprentice under someone for at least 2 years, plus have a college degree. Many appraiser's are small operations and can't take on an apprentice, so getting in can be tough. Then, you look at working on becoming an appraiser for 6 years to make 60K, and you naturally ask, "why don't I just become a doctor or lawyer"? Another downside, is residential lending is heavily regulated.

That being said, becoming a doctor was never on my radar. If you have a way to get into appraising, it can be very rewarding because you can set your own schedule (hint: if you want to make more than 60K, plan on having a very full schedule).

I'm an appraiser. I actually like working for AMCs because they normally pay on time, but all it is doing is adding a middle man to scrape some money off the top. There are good appraisers working for AMC, but if you can avoid it you should. An SRA may charge a bit more, but most likely not more than $50-$100, which an AMC would make anyway.

Many lending regulations require the lender to use an AMC, but some banks use them just because they are being over cautious about regulation. Often, smaller, community banks have more ability to direct the appraisal.

In a duplex appraisal in my market, I typically look at comps (sales comparison model) and income approach. In my market, the banks are typically looking at comps, so it's not a complex income appraisal you might find in a larger commercial property. However, I do look at both things.

One thing to consider, though, is both these methods work together. Often, investors will say, "Why don't you appraise it for the income?". Other than the bank doesn't normally request that alone, it is also important to note that the numbers used in an income approach are often derived from the sales comparison comps, or other sold comps.

The income approach section of a duplex appraisal form relies on the Gross Rent Multiplier. The most reliable place to get a GRM is from the comps I have, provided I can get rental rates on them. Therefore, these two methods back each other up, and often yield similar results.

This was an accidental post when I hit "new topic" instead of quick reply. Not sure how to delete.

I'm an appraiser in West Tennessee.

If I can ever help any of you, let me know. Naturally, I can't speak on houses I'm appraising, but I make a habit of taking the long way and being very alert. I'm basically Driving for Dollars all day everyday. I do every county east of Memphis and West of the Tennessee River.

If I can ever help any of you, let me know. Naturally, I can't speak on houses I'm appraising, but I make a habit of taking the long way and being very alert. I'm basically Driving for Dollars all day everyday. I do every county east of Memphis and West of the Tennessee River.

I'm an appraiser. I always wanted some property, but I waited a while. Then, I figured I have a few advantages over people not in real estate, so I should probably jump in. My main advantages are I know values, and I'm out driving the streets every day. Even still, the margins can be tight, and I don't know anyone who makes it by taking it lightly. I do know several successful investors who are not in real estate full time.

Not to be self serving, but an appraiser would be a great place. I know most people don't want to spend $300-$500 to know what a property is worth, but it could cost you a lot more, and a good appraiser can know as much as (or more) a good realtor. You definitely don't need to invest if you don't know the market or can't accurately determine it.

Plus, a lot of us appraisers are fed up working for lenders who have crazy strict rules and regulations that cut into our time and bottom line. If it is a simple property, you might could find an appraiser who would do an appraisal from the exterior only, or just a less detailed appraisal that doesn't require a bunch of red tape. All actual appraisals require a minimum of work known as USPAP (Standards). But many appraisers also do consulting work where different standards may apply. This might could get your cost down to $200 depending on the market. I know you don't want to spend a few hundred on each potential deal, but you might do it on a deal you are very serious about until you are comfortable with the market.

Finally, remember than an appraisal is just an opinion of value and someone else's opinion may vary. You may want an appraiser who know actual market values or even could tell you a conservative price, or a maximum price.

You could also call a realtor who would potentially one day work for you, but you have to be careful about their alegiances as well.

And the few I've watched, it seems like an unreasonable amount to draw an uninformed investor or a quick buy in a rural area where there is little competition. The reserve is not met, then the property is listed through traditional MLS, also at a price the market won't pay.