Tuesday, March 4, 2014

438 “O” Street Then and Now

438 'O' Street Then and Now
By: Israel Gonzalez

Property today
There was a property on 438 “O” Street Fresno, CA 150 feet south of Santa Clara Street. The owner of the property at the time was Mrs. Helen Hulst. An appraisal was done by Massie’s Appraisal on April 7, 1966 because the City of Fresno needed to find the proper compensation since they were taking the property through imminent domain. Imminent domain is the right to seize private property for public use with just compensation paid to the owner of the property.
Building 1
The property had 3 buildings all in poor condition and built similar with a concrete foundation, wood framing, wood siding exterior, and rolled composition covered roof. The property also has a bathhouse with attached storage shed. There are 3 dwellings within building 1 were all in poor condition and built. The first dwelling had 3 bedrooms and a kitchen and an exterior bathroom that is shared with the second dwelling. The second dwelling has a living room, 1 bedroom, and a kitchen. The third dwelling has 2 bedrooms, a kitchen, and a bathroom.
Building 2

The appraiser used comparables to assess the value with 2 methods. The first was based on a price per square foot rate and the second was a gross rent multiplier. Through the comparables the appraiser came up with a price per square foot of $3.50, which would make the total square footage of the 3 dwellings at 2,111 sqft and produce a value of $7,389. For the gross net multiplier it was concluded that the multiplier was 45 and with the 3 dwellings producing $170 per month the value produced is $7,650.
Building 3
Looking at the appraisal with an appraiser friend of mine he pointed out that the validity of the appraisal is something to question. The reasoning isn’t explained very well. According to the information and comparables in the appraisal you can see that the appraiser was being conservative with their established value. This is most evident with the gross rent multiplier (GRM) who seems much to low compared to that in the comparables. After looking through all the material is seems that the appraiser made the GRM work to match the conservative number established by the cost per square foot. If the GRM were the smallest multiplier from the comparables it would have brought value of the property to around $9,000.
The appraised value of the property was $7,500 to looking at different multipliers I think that today the property would have been valued at $93,500. He also brought up that this was a terribly difficult property to appraise and it would be more difficult to appraise today. It was concluded that the property was most likely undervalued, as many are when appraised for imminent domain, about $1,500 and should have been appraised at about $9,000.

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