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South Bend Redevelopment Commission <br />Regular Meeting -August 6, 2010 <br />6. NEW BUSINESS (CONT.) <br />B. Airport Economic Development Area <br />(1) continued... <br />Upon a motion by Mr. Downes, seconded by <br />Mr. Alford and unanimously carried, the <br />Commission approved the Loan Agreement, <br />Promissory Note and Grant Agreement for <br />environmental remediation at 1100 Prairie <br />Avenue. <br />(2) Resolution No. 2737 related to acquisition <br />of property at 1513 S. Scott Street. <br />(Residential) <br />Mr. Relos reported on research he did on <br />how appraisals are done for rental property. <br />He hoped to provide an understanding of the <br />low appraisals we are getting for rental <br />properties, versus the alternative methods of <br />appraising that result in a higher appraisal. <br />Mr. Relos noted that appraisers are required <br />to follow the Uniform Standards of <br />Professional Appraisal Practices. This limits <br />how they can appraise a property, without a <br />statement of an extraordinary assumption. <br />Under those standards, the Definition of <br />Market Value is that the "buyer and seller are <br />typically motivated-'. That is true in the <br />general market. but the Commission doesn't <br />always have a motivated seller. We may <br />have an interested seller, but they are not <br />always motivated to sell. That difference is <br />significant. <br />Income approach: <br />Appraisals on single family rentals nornlally <br />use an income multiplier, commonly called a <br />gross rent multiplier. These multipliers are <br />COMMISSION APPROVED THE LOAN <br />AGREEMENT, PROMISSORY NOTE AND GRANT <br />AGREEMENT FOR ENVIRONMENTAL <br />REMEDIATION AT 1 100 PRAIRIE AVENUE <br />10 <br />