In a previous post I promised to provide a more in-depth explanation of using simple linear regression to adjust comparable sales. Today I will fulfill that promise. To do so, I will use an example of a size adjustment from a recent commercial appraisal I performed on an office building in Louisville, Kentucky. Appraisers have known for years … [Read more...]
Adjusting Comparable Sales Using Multiple Linear Regression Equation- Downloadable Spreadsheet
The most accurate method to derive adjustments applied to comparable sales is to perform a multiple linear regression on a large body of sales. The question then becomes "How can I use the equation to adjust my comparable sales?" Well, it took me some time to figure this out but here's a spreadsheet that does just that. Here's a link to a page on … [Read more...]
Equity Dividend Rates – Downloadable Spreadsheet
An equity dividend rate, also known as cash-on-cash, is the annual rate investors expect to receive on their equity investment. For example, suppose I invest $10,000 and expect to receive $1,500 annually from an investment. The equity dividend rate may be calculated as: $1,500/$10,000 = .15 or 15%. There are a few different methods to estimate what … [Read more...]
Commercial Real Estate Appraiser in Kentucky
As a commercial appraiser in the great State of Kentucky, part of my job is to analyze local economic trends. We've all seen the ghost towns in rural areas as the population migrates towards more urbanized areas of the state. Needless to say, this trend wreaks havoc on the value of the commercial real estate left behind. Conversely, some less … [Read more...]
Multifamily Apartments in Elizabethtown, Kentucky
In the process of pursuing my MAI designation I am working to evaluate the supply and demand for apartments in Elizabethtown. To date, I have identified 69 apartment projects and around 1,500 individual units. This, my friends, is a monumental task...now back to work! Russell Photo Credit … [Read more...]
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