HomeMy WebLinkAbout6D(13) Administrative Settlement~~c.3)
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1200 County-City Building, 227 West Jefferson, South Bend, Indiana 46601-1830 Phone 574/235-9371 Fax 574/235-9021
To: Redevelopment Commission
From: David Relos, Economic Development Planner
Subject: Administrative Settlement for acquisition of 733 W. Indiana Ave.
Date: July 23, 2010
This is the staff report for the administrative settlement that is needed for the acquisition of
733 W. Indiana Avenue. According to the Uniform Relocation Act (Act), which has been
adopted as the Commission's relocation policy, an administrative settlement is authorized in
cases where an additional payment is necessary to acquire a property.
Before the Commission today was Resolution No. 2734, setting the offer price for this
property at $24,500, which is the average appraised value. When looking strictly at the
income approach, the average appraised value is $29,375. The house is assessed at
$30,600.
The property owner has supplied staff with an appraisal that was done in November 2004,.
from which he was granted a loan by TCU in December 2004, in the amount of $55,000.
This loan appears on the title search Meridian completed in May 2010. The owner currently
owes approximately $40,000 on this loan, which has been verified.
The property owner also supplied a formula for rental properties he states TCU uses to
value rental properties. According to this formula, the property would be valued at
approximately $42,000. Staff did verify with TCU that they use a cap rate of 9 - 11 %. Also
verified is the lease for $650 /month in rent.
The property owner has agreed to accept $40,000, the amount currently owed on this
property.
Staff feels the acquisition cost of $40,000 is reasonable for this property, and requests your
approval of the administrative settlement to allow for the acquisition of this property.
What We Do Today Makes A Difference!
JSM Properties
10025. Lafayette Blvd. Ste.1
South Bend, IN 46601
574-287-4803 Office
574-288-9040 Fax
July 19, 2010
Community and Economic Development
227 West Jefferson Blvd.
Suite 1200 S
South Bend, Indiana 46601
Attn: Dave Relos
Re: 733 W. Indiana Ave
South Bend, IN 46613
Mr. Relos:
This is Teacher's Credit Union formula for rental property values:
Per year
$650.00 rent per month = $7,800
Vacancy-10% _ - 7gp
$7,020
Taxes = - 1180
$51340
Insurance = - 716
$5,124
Maintenance = - 500
Net Operating Income = $4,624
Cap Rate = 11%
Value of Investment Property = $42,036
I owe approximately $40;000.00 on this property. As you can see by the 2004 appraisal, this house
appraised for $55,000.00. I'm aware of the market downturn, but this has not affected the income of
the property. The condition of the property is about the same as it was in 2004. Therefore, I think
$40,000.00 is fair purchase price.
.. A~'FRAISALS F~Li IIS, !A!C
, REAL ESTATE APPRAISAL SERVICE
Na.
A~PRA's~AL OF
LOCATED AT:
733 W INDIANA. AVE
SOUTH BEND, IN 46613
FOR:
JAiv1ES fV1CCUNE
2421 BAY POINTE DR
ST JOSEPH, M! 4°085
gORRO{NEP.:
JAtt7ES MCCUNE
(a7 t`3C:
November S, 2004
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CHRIS NIEDBALSKI
3422 MISHAWAKA AVE, SOUTH BEND, IN 46615 574.288-2320 FAx 5/4-~~sa-~~~~
aPPIdA143ALu PLUS, INc
REAL ESTATE APPRAISAL SERVICE
File No. 733!
11!10/2004
JAMES MCCUNE
2421 BAY POINTE DR
ST JOSEPH, MI 49085
File Number: 7331
In accordance with your regt!est, I have personally inspected and appraised the real property at:
733 W INDIANA AVE
SOU? I I BEND, !N 46613
The purpose of this appraisal is to estimate the market value of the subject property, as improved.
l~he property rights appraised are the fee simple interest ir. the site and improvements.
I!~ my opinion, the estimated market value of the property as of November 8, 2004 is:
$55,000
Fifty-Five Thnusand Dollars
The attached report contains the description, ana{ysis and supportive data for the conclusions,
final estimate of value: descriptive photographs, limiting conditions and appropriate certifications.
Gt•iRIS P•!lEDBALSKI
~~~~ ~r.~ naaa~ ~~a_~aa_~320 FAX 574-288-2385