Part III of IV This four-part article summarizes what valuation specialists in all property appraisal disciplines (herein called “appraisers”), company managements, and their legal counsel need to know about property appraisals prepared within a bankruptcy environment. For purposes of this discussion, the term property includes real estate and real property, tangible personal property, and intangible personal property. Part one of this article discussed the reasons to conduct the bankruptcy-related property appraisal. Part two of this article discussed (1) the elements of the property appraisal assignment and (2) the appraiser’s due diligence considerations. This third part summarizes the generally accepted bankruptcy-related…
-
-
Hotel Business Value QuickRead’s Technical Editor, Roberto Castro, reviews BVR’s What It’s Worth: Hotel Business Value. There are few resources available for business valuation professionals that focus on the valuation of hotels. The “go to” reference books have been Stephen Rushmore, MAI and Erich Baum’s Hotels & Motels: Valuations and Market Studies, a 2001 Appraisal Institute publication, and David Harper’s Valuation of Hotels for Investors, a 2008 EG Books publication. BVR’s Special Report, What It’s Worth: Hotel Business Value, covers some of the ground included in these other publications but highlights opportunities available to business valuation practitioners and takes issue…
-
According to a recent article in The Appraisal Journal, industry sales among the 616,098 restaurants in the U.S. totaled $425.6 billion in 2012. Chain restaurants make up nearly 45% of the industry population in the U.S., and at a growth rate of 2.2% are expected to overtake independent establishments by 2023. Between 2010 and 2012, 22,000 restaurants were sold for a total of almost $11 billion. The article examines the projected growth rate for the restaurant sector, as well as the valuation methods that need to be employed based on whether the establishment is part of a chain, a…
-
Fifteen U.S. Representatives have sent a letter to the U.S. Small Business Administration (SBA) seeking clarification as to why the agency changed its requirements regarding real estate appraisers handling going concern appraisals for special use properties. In 2011, the SBA allowed appraisers to take on such projects after completing an eligibility course. As of January 2014, the agency changed its valuation requirements involving business and intangible assets in situations where there is a change in ownership, a special use property and a residual business value of more than $250,000 to the loan amount. In these situations, the SBA now requires…
-
According to a recent report from the Office of the Inspector General (OIG) with the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac continue to fail to properly analyze data collected from the Uniform Collateral Data Portal (UCDP) and take considerable risks when purchasing and guaranteeing single-family residential mortgages. The report charged both Freddie and Fannie with not considering all the appraisal data provided to them through the UCDP, which was created in 2010 to improve loan quality and risk management. Indications were made that 56,000 loans purchased by Freddie and Fannie between January and June of 2013…
-
Fannie Mae has officially launched a new website focused solely on appraiser quality monitoring. The site is based on Fannie’s new appraisal review process, which was created to support data accuracy and consistency. Through the site, lenders now have access to a list of appraisers whose reports are subject to a complete and thorough review by the agency, as well as those whose work is no longer accepted. Access to the list, which is updated monthly, is gained through the Technology Manager portion of Fannie’s website and is available to sellers and service providers alike. The monitoring site arises, in…
-
Rule Will Require a Second Appraisal in Situations Where a Home is Being Flipped for a Quick, Higher Resale A new rule passed Jan. 15 gives mortgage lenders an additional year to institute appraisal standards for higher-risk loans, Bloomberg reported, and Appraiser News Online highlighted. The extension is one of the revisions that regulators made to the Dodd-Frank Act to address concerns from financial firms. Appraiser News Online explains that:
-
Five Limited Partnerships Owned Real Estate Complexes Built in Accordance with Federal Low Income Housing Guidelines The Appraisal Institute Newsletter notes that Bankruptcy cases assigning value to apartment buildings owned by debtors are required to include the value of remaining low-income housing tax credits. The news was originally reported by Bloomberg BNA on July 3. A valuation order setting market price of debtors’ low-income housing properties must consider tax credits that are covenants running with the real properties. The fair market value of apartment buildings in a bankruptcy case must include the value of the remaining federal low-income housing tax credits, the Bankruptcy…