ABC Residential Investors, LLP, is considering the purchase of a 120 unit apartment complex in steel city, Pennsylvania. A market study of the area reveals that an average rental of $600 per month unit could be realized in the appropriate market area. During the last six months, two very comparable apartment complexes sold in the same market area. The oaks, 140 unit project, sold for $9 million. its rental schedule indicates that the average rent per unit is $550 per month. Palms, a 90 unit complex, Is presently renting units at $650 per month, and its selling price with $6.6 million the mix of number of bedrooms and sizes of units for both complexes is very similar to the subject property in both appear to have normal vacancy rates about 10% annually. All rents are net so tenants pay all utilities and expenses.a. Based on the data provided here, how would an appraiser establish an estimate of value?b. What other information would be desirable in reaching a conclusion about the probable value for the property?

Average rental per unit is $550 per month Rent per month Unit project Price $ 550 140 9,000,000…

Answered: ABC Residential Investors, LLP, is…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 15E: Gina Ripley, president of Dearing Company, is considering the purchase of a computer-aided...

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ABC Residential Investors, LLP, is considering the purchase of a 120 unit apartment complex in steel city, Pennsylvania. A market study of the area reveals that an average rental of $600 per month unit could be realized in the appropriate market area. During the last six months, two very comparable apartment complexes sold in the same market area. The oaks, 140 unit project, sold for $9 million. its rental schedule indicates that the average rent per unit is $550 per month. Palms, a 90 unit complex, Is presently renting units at $650 per month, and its selling price with $6.6 million the mix of number of bedrooms and sizes of units for both complexes is very similar to the subject property in both appear to have normal vacancy rates about 10% annually. All rents are net so tenants pay all utilities and expenses.

a. Based on the data provided here, how would an appraiser establish an estimate of value?

b. What other information would be desirable in reaching a conclusion about the probable value for the property?

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