real estate appraisal and time management calvin cummings, mai cummings appraisal group, inc
TRANSCRIPT
Calvin Cummings, MAI
1983-1988: Cushman & Wakefield
1988-1998: CB Richard Ellis
1998-2002: Unicity International
2002-2002: LoopNet
2002-2008: Cummings Appraisal Group, Inc.
Founder, Editor, Publisher, CB Richard Ellis National Investor Survey, 1991-1997
Appraised properties totaling in excess of 100 million Sq.Ft. and $10 billion since 1983
Appraiser
Definition:– “One who is expected to perform valuation services
competently and in a manner that is independent, impartial, and objective.” 1
1 Uniform Standards of Professional Appraisal Practice (USPAP)
The Valuation Process
Define the Appraisal Problem Determine Scope of Work Collect Data & Describe Property Analyze Data Estimate Land Value Apply Applicable Approaches to Value Reconcile Value Indications Report Final Value Conclusion The Appraisal Report
Definition of the Problem
Identify Client & Intended Users Intended Use of Appraisal Purpose of Appraisal & Definition of Value Date of Opinion of Value Identify Property Characteristics Extraordinary Assumptions Hypothetical Conditions
Scope of Work
Extent Property is Identified Extent Property is Inspected Type and Extent of Data Researched Type and Extent of Analysis Applied
Data Collection & Property Description
Market Area Data:– Region, City & Neighborhood Data– Apartment, Industrial, Office & Retail Market Data
Subject Property Data:– Land, Improvements, Personal Property, etc.
Comparable Property Data:– Cost and Depreciation– Sales, Listings, Offerings– Income, Vacancy, Expenses, Cap Rates, etc.
Data Analysis
Market Analysis:– Market Study– Marketability Study
Highest and Best Use Analysis:– Site As Though Vacant– Property As Improved
Land Value Opinion
Sales Comparison Extraction Allocation Subdivision Development Land Residual Ground Rent Capitalization
Cost Approach
Select One of Two Possible Cost Bases:– Replacement or Reproduction Cost
Estimate Costs Using 1 of 3 Techniques:– Comparative-Unit, Unit-In-Place, or Quantity Survey
Estimate Depreciation (1 of 3 Methods):– Age-Life, Market Extraction, or Breakdown
Depreciated Value of Improvements Add Contributory Value of Site Improvements Add Land Value (Based on H&B Use as Vacant)
Research & Verify Sales Data: CoStar:
– COMPS, Commercial MLS, Property Professional Loopnet:
– Property For Sale or Lease, Recent Sales Multiple Listing Services:
– i-Tech MLS, TheMLS, MRMLS, MLSAlliance RealQuest.com, RENTV.com, LABJ, etc. Appraisers, Brokers, Sellers, Buyers
Sales Comparison Approach
Sales Comparison Approach
Comparative Analysis: Real Property Rights Conveyed Financing Terms Conditions of Sale Expenditures Made Immediately After Purchase Market Conditions (Time) Location Physical Features Economic Characteristics Use (Zoning) Non-Realty Components of Value
Income Capitalization Approach
Income & Expense Analysis: Contract Rent (Lease Analysis) Market Rent (Comparable Lease/Rental Survey) Potential Gross Rental Income (PGRI) Other Income (Reimbursements & Misc. Income) Potential Gross Income (PGI) Vacancy & Credit Loss Allowance (V&CL) Effective Gross Income (EGI) Operating Expenses (Expense Analysis) Net Operating Income (NOI) Tenant Improvement Costs & Leasing Commissions Annual Cash Flows & Reversionary Value
Income Capitalization Approach
Direct Capitalization:– Convert single year’s income– Divide Net Income by Cap Rate– Multiply Gross Income by GIM
Yield Capitalization / DCF Analysis:– Forecast Annual Cash Flows & Reversion– Discount Cash Flows with Yield Rate
Reconciliation of Value Opinions
Dependability/Applicability of Each Approach Variations/Differences Among Indications Weighting of Value Indications Final Value Conclusion:
– Single-Point Estimate– Value Range
The Appraisal Report
Standards (USPAP, Appraisal Institute) Report Options:
– Self-Contained Appraisal Report– Summary Appraisal Report– Restricted Use Appraisal Report
Types of Reports:– Oral Reports– Form Reports (URAR, 71-A, 71-B, etc.)– Narrative Reports
The Appraisal Report
Title Page Letter of Transmittal Table of Contents Summary Appraisal/Report Type Assumptions Purpose/Intended Use Value Date/Definition Property Rights Appraised Scope of Work Property Identification History of Property Location Data
Site Description / Zoning Improvement Description Taxes & Assessment Data Market Analysis Highest and Best Use Analysis Land Valuation Cost Approach Sales Comparison Approach Income Capitalization Approach Reconciliation Estimate of Exposure Time Qualifications of Appraiser Addenda
Time Management - Why & How?
Live a Balanced Life Gross a Successful BusinessAllows You to Achieve Your Dreams Set Goals, Plan, Prioritize & Execute Project & Task Management Getting Organized Taming the “Paper Tiger” Managing E-mail
Growing a Successful Business
Leadership
Management
Strategic Marketing
Lead Generation
Lead Conversion
Client Fulfillment
Accounting & Finance
Achieving Your Dreams
# 1 - Set Goals– For each life or work area• S pecific• M easurable• A ttainable• R ealistic• T imely
# 2 - Create a Plan
# 3 - Take Action!
“If You Fail to Plan, You’re Planning to
Fail”
“A Goal Without a Plan is only a Dream”
“A Journey of a Thousand Miles Starts with but a Single Step”
Planning – Using an Outline
Create a Hierarchical Outline: Level 1: Personal & Business
– Level 2: Result Areas or Roles Level 3: Goals
– Level 4: Projects Level 5: Tasks
Planning – A Work Example
Work– Sales (Salesperson)
Goal: I’ve personally earned $50,000 in commissions in 2Q08 by selling 3 of my investment property listings totaling $1,700,000 and qualified for the Top 5, $25,000 Bonus Pool by July 1st. I feel tremendous confidence achieving goals I set for myself and I feel so relaxed after taking a luxurious 2-week cruise to Hawaii.
– Project 1: Generate 300 qualified leads by 3/31/08 Task 1: Order title co list of apt bldg owners in SFV area Task 2: Send list to PrintPros to do direct mail campaign Task 3: Have Assistant contact 20 owners per day
Managing Projects & Tasks
Let Assume:– 8 Result Areas or Roles x 5 Goals = 40 Goals– 40 Goals x 3 Projects = 120 Projects ! ! !– 120 Projects x 3 Tasks = 360 Tasks ! ! !
How do you manage all these tasks?
Prioritize Projects & Tasks
Prioritizing
Pareto Principle
FranklinCovey ABC-123 Prioritization Scheme
Stephen Covey Time Management Matrix
20% of Efforts = 80% of Results
Simplify & Focus
Simplify Your To-Do List
Focus on Top 3-5 Projects
List only Next Actions (NAs)
Work on One Thing at a Time
Avoid Procrastination
Procrastination
Break large projects into smaller manageable tasks
What is the one Next Action that moves Project forward?
Eat That Frog, by Brian Tracy
Feel The Fear and Do It Anyway, by Susan Jeffers
Planning Tools
Planners (FranklinCovey, Time/Design) Swift To-Do List OneNote & Outlook Outlook with Business Contact Manager AchievePlanner
Daily vs. Weekly Planning
Tyranny of the Urgent
Quadrant II Focus
Big Rocks
“The Key is not to prioritize what’s on your schedule but to schedule your priorities”
Get Organized
Invest in the right equipment:– Hanging & Manila File Folders– Rolling File for Active Projects– Vertical File Holders & 3-Ring Binders– Brother P-touch labeler– Dymo LabelWriter– CardScan (Business Cards)– Xerox DocuMate 252 Duplex Scanner– PDA/Smartphone
Taming the Paper Tiger
• Make list of areas to organize & prioritize• Make list of equipment/materials & buy• Set up organization systems in your office• Purge/throw away unwanted materials• File active projects in short-term projects area• File archive materials in long-term file area• Use Inbox as one and only collection point• Process Inbox twice daily• Stop stacking and start filing
Time Management Summary
Look at All Areas of Your Life Set Goals, Plan, Prioritize & Execute Simplify Your Project & Task Lists Start Using Weekly Planning Focus & Overcome Procrastination Get Organized Master Your Paper Inbox Learn How to Master Your E-mail Inbox