Comparable 2 - 8526 Northern St.

Interesting Comparable  in that they paid $133/SF vs. $169/SF that subject property is asking. That would put subject property at $1,653,292

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However, this comparable is in a different market area but close.  We need to consider this one with caution

• Sold Price: 1,600,000

• Acres/SF: 4 acres / 174,240 SF

• Building SF: 12000

• Price/SF: 1.6m / 12000 SF = $133.33/SF

• Year Built: 2000

• Date Sold: 7/21/2015

Recommendation

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I am showing the most comparable properties to the subject property and within a 7 mile radius of the subject property.  I also reviewed land and building prices  in the market area. Given the location of this property on a less traveled road in a mainly rural market area and the age of the improvements, I believe this property to be overvalued even though it has 6 total acres of land. The main building on the subject property was built in 1979. The other available comparable sales are ​less than 20 years old and are typically on roads with higher traffic counts, which generally increases the value. The concern is that if you ever had to sell this property, they would certainly evaluate the property’s accessiblity and traffic count. Since this property isn't on a major road, the extra undeveloped land doesn't add enough value to justify the asking price in my opinion. The value for you, as a user of the property is in the structures and improvements. Given their age compared to the others, we should be cautious.

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Despite these deficiencies, the property is well-maintained from my/our visual inspection of the property. The only known deficiency is that the roof likely needs to be replaced, which can cost as much as $80,000 depending on the extent of the problem (10,000 sf building with $8 psf in repair cost).  It is already in the category of a church property and functioning as such.  The feasibility period would determine actual condition of the physical structures, environmental conditions, flood plain susceptibility, validity of existing boundaries and any other negotiation points.

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Therefore, it is my recommendation that we offer $1,300,000 cash, with a 60 day feasiblity period, 30 day closing period and offer $20,000 of earnest money.  We can eventually ask them not to put a new roof on if they insist on a higher price, but my recommendation would be to back the cost of the roof out of the purchase price so that you can control the construction/repairs.  TREM will likely look at our offer and this report and balance the likelihood of getting a higher offer down the road.  If the seller will not negotiate for some reason, and you really want the property, we will need to be willing to move higher. and reevaluate our position.

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