Our main focus is your commercial/industrial appraisal needs. Our clients look to us for appraisals and consultations for financial lending activities, accounting matters, estate planning, gifting, insurance purposes, condemnation, tax appeal, acquisition, disposition and settlement matters. On a regular basis, our clients call upon us for appraisal review assignments. An appraisal review may be in order to check for USPAP compliance, or to analyze the quality of work and final value opinion of another appraiser.
Our appraisal experience is diversified in many property classifications. Real estate in which we have specific expertise include the following property types.
Single / Multi Tenant Retail /Office
Hotels / Motels Hospitality
Nursing Homes/ Assisted Living Facilities
Special Use Property Types
Industrial / Manufacturing/ Warehouse/ Distribution / Storage Facilities
Schools / Government Municipality Facilities
Hospitals / Surgery Medical Facilities
Child Day Care Facilities
Residential / Multi-Family Apartment Projects
Vacant Commercial Land
Gas Stations / Convenience Stores
Sub Division Analysis
Mobile Home Parks / Recreational Facilities
We are capable of undertaking commercial appraisal assignments throughout the state of Indiana and Florida. The principal at RPM Asset Valuation Services, Inc. is a member of the American Society of Appraisers and holds the Accredited Senior Appraiser (ASA) designation in the Real Property discipline.
VALUATION PROCESS DEFINED
The valuation process is the orderly program in which the data used to estimate the value of the subject property are acquired, classified, analyzed, and presented. The first step in the process is to define the appraisal problem - i.e., identify the real estate, the effective date of the value estimate, the property rights being appraised, and the type of value sought.
Once this has been accomplished, the appraiser collects and analyzes the factors that affect the market value of the subject property. These factors are addressed in the regional and local market analysis, the site and improvement analysis, and the highest and best use analysis, and in the application of the three approaches to value.
Appraisers generally use three typical approaches to value: the Cost Approach, the Sales Comparison Approach (or the Market Data Approach), and the Income Capitalization Approach.
The Cost Approach is a tool in the appraisal process that indicates the anticipated cost of creating property. It is defined as, ďA set of procedures through which a value indication is derived for the fee simple interest in a property by estimating the current cost to construct a reproduction of (or replacement for) the existing structure, including an entrepreneurial incentive, deducting depreciation from the total cost, and adding the estimated land value.
Adjustments may then be made to the indicated fee simple value of the subject property to reflect the value of the property interest being appraised. The use of this approach is predicated on the assumption that a prudent investor is not warranted in paying more for a given property than its cost of production. When valuing recently completed sites and/or improvements, the Cost Approach is normally a valid indication of aggregate project value.
The Sales Comparison Approach is a process where an indication of value is sought by analyzing recent transactions involving similar properties. It is defined as, "A set of procedures in which a value indication is derived by comparing the property being appraised to similar properties that have been sold recently, then applying appropriate units of comparison and making adjustments to the sale prices of the comparables based on the elements of comparison.
The Sales Comparison Approach may be used to value improved properties, vacant land, or land being considered as though vacant; it is the most common and preferred method of land valuation when an adequate supply of comparable sales are available. The use of this approach is predicated upon the assumption that a prudent investor will pay no more for a given commodity, (in this case an interest in real estate), than he or she can obtain elsewhere in the market. The Sales Comparison Approach produces a good indication of value when sales of similar properties are available.
The Income Capitalization Approach is predicated on the assumption that a definite relationship exists between the amount of income a property can earn and its value. In this approach, the anticipated annual net income of the subject property is processed to produce an indication of value. It is defined as, ďA set of procedures through which an appraiser derives a value indication for an income-producing property by converting its anticipated benefits (cash flows and reversion) into property value.
This conversion can be accomplished in two ways. One yearís income expectancy can be capitalized at a market-derived capitalization rate or at a capitalization rate that reflects a specified income pattern, return on investment, and change in the value of the investment. Alternatively, the annual cash flows for the holding period and the reversion can be discounted at a specified yield rate.
The final step in the valuation process is the reconciliation or correlation of the value indications. In the reconciliation, the appraiser considers the relative applicability of each of the approaches used, examines the range of value indications, and gives most weight to the approach that appears to produce the most reliable solution to the appraisal problem.
There are two (2) basic types of appraisals that can be performed; Restricted Appraisal Report, or An Appraisal Report (also referred to as a Summary Appraisal).
A Restricted Appraisal Report is typically requested by individuals that are somewhat familiar with the real estate at hand. A full interior and exterior physical inspection will be performed on the real estate. In some cases, an exterior inspection is sufficient to satisfy the scope of work. The Restricted Appraisal Report is a limited report that typically only states the appraiserís value conclusion with very limited explanation. Many clients request a Restricted Appraisal Report when time is of the essence and the appraisal report will be used internally. The appraiser must disclose in the report the actions taken or not taken in deriving the data used to support the value conclusion of the real estate at hand.
An Appraisal Report typically includes the appraiser performing a full interior and exterior physical inspection of the real estate and developing all applicable approaches to value if deemed applicable to the real estate and appraisal problem.
This particular appraisal will include all market research, assemblage of pertinent data (listing and classifying), listing of appropriate analytical techniques and reporting of knowledge, experience and judgment. This type of appraisal is considered more comprehensive, illustrative and reliable than a Restricted Appraisal Report. The Appraisal Report is the most frequently requested.
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