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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 />(2) continued... <br />Mr. Relos feels the Commission should <br />consider this valuation method for rental <br />properties, because there are properties we <br />are dealing that have been appraised by a <br />bank using the Cap Rate method. <br />Mr. Relos suggested to the Commission that <br />it use the Cap Rate approach to calculating <br />rental property value. Banks use it, <br />especially for their good customers who own <br />a large number of rentals. <br />Mr. Inks noted that though appraisers are <br />limited by their rules. we don't have sellers <br />who are motivated to sell. We need to get <br />from the market average price to the reality <br />of what we need to pay in order to create a <br />willing seller. As Mr. Relos brings forward <br />his administrative settlements on several <br />properties throughout today's agenda. the <br />Commission will see significant <br />discrepancies between what the appraiser <br />valued the properties at, using the Market <br />Approach, and what staff is suggesting the <br />Commission accept as an administrative <br />settlement. <br />Mr. Varner said he realized the Commission <br />needs to find a way to motivate a seller. He <br />wanted to know we have a standard method <br />to establish our price in order to keep each <br />successive owner from wanting more than <br />the previous seller received. Mr. Inks <br />responded that that is the goal of this <br />explanation today: to establish such a <br />method. <br />12 <br />