Posts Tagged ‘parcel’

Appraising Commercial Real Estate Fractional Interests

July 15th, 2011

When appraising commercial real estate, it is the value of the interest held by an owner of an asset that is actually appraised, and when there is more than one owner, there can be what is called a fractional (or undivided) interest. A fractional interest consists of a percentage in the ownership interest for a real estate asset. Since it is “undivided” there is no actual respective physical piece of the real property that any party owns, but instead, each party’s ownership is considered a percentage of the whole. In other words, if I have a 20% undivided interest in a 10-acre piece of commercial land, I don’t automatically have the right to sell two acres out of it at will. It would require the agreement of all of the interest owners to sell the entire parcel, and then the proceeds are split based on the ownership-interest percentages.

If someone owns a 20% undivided interest in a commercial property, and the appraiser is employed to estimate the value of that person’s 20% interest, the appraiser must consider whether or not the value to the interest owner is solely 20% of the “whole” value, or if a discount should be applied to the partitioned value because of the fractional interest. It is widely accepted among real estate appraisers that the value of each individual fractional interest in a property is typically worth less than the percentage value of the “whole”. This is based on the premise that the interest owners do not have complete control over the asset to sell or mortgage the property without the agreement of the other fractional interest owners. However, the fractional interest itself can be sold without agreement by all owners, but is usually sold at a discount due to the limited right to control the asset.

The ideology of discounts to fractional interests is recognized by the United States Tax Court, and there have been many court cases which support these discounts. In the case of Ludwick v. Commissioner, the owners argued for a 30% discount to the value attributable to their share of the real estate to reflect the partial interest disadvantages. The IRS felt that only an 11% discount was applicable. The court ultimately ruled that a 17% discount was appropriate. » Read more: Appraising Commercial Real Estate Fractional Interests

Simple Homes and Green Construction Ideas

June 17th, 2011

Have you ever dreamed about building a home of your own, only to be awakened to the reality that it would cost a fortune? Perhaps you don’t want to drown in a sea of debt. There are ways to build a home of your own without breaking the bank.

For example, one of my relatives, who was visiting us in Texas after moving to Africa as a missionary with Youth With A Mission, got ahold of a book I had bought online, Homework: Handbuilt Shelter, by Lloyd Kahn. He was so inspired by the book that when he returned to Zambia, he bought a parcel of land and built a home out of a mixture of natural and man-made materials for around $1500, which is pretty impressive.

But how do you build one in N. America where land prices are so high and materials cost so much? If you do not own a piece of land, it is wise to make your dwelling portable so that you can move it as needed. Remember that here we have high prices, but we also have lots of things that people throw away or give away for free. There are also many areas where there are free materials found in nature that you can use.

If you are looking for a simple, affordable structure that is semi-portable, strong, well insulated, wind, water, and weather proof, then the yurt or ger, which is common in central Asia is the best. Most yurts and gers are designed to withstand high winds, freezing weather, rain, and cold. These have become popular in other parts of the world, and there are several places online where one can find instructions on how to build a yurt out of recycled materials, materials from nature, or store-bought materials. These are almost-free structures that any determined person could build.

The teepee of the plains Indians of N. America is another remarkable design for a portable, green shelter. The American Indians were able to stay warm in these simple structures by building a fire in the middle of the teepee. Be very careful if you build a fire inside a teepee. If the teepee cover is made out of a plastic material, it will melt when you build a fire inside it. Fire dangers and damage can be reduced if the teepee is made out of canvas and natural materials and to reduce smoke, it should be at least 12′ high, and 14-18′ is best.

Some of the indigenous tribes in N. America built wikiups to protect them from the elements. For a temporary shelter in emergency, the wikiup can’t be beat. These can be made of saplings, sticks, grass, straw, tree branches, and leaves.

Moving on to more stable structures, if you plan to build a permanent, green home, it is wise to first secure the land where the home will sit. The best place to build an affordable, handmade, green home is in a rural area. Look for an area away from major cities and highly populated towns. Building officials in farming and rural areas will be less likely to harass you over your unique home. If you get to know the locals, you may find a farmer or property owner that is willing to sell you a parcel of land. Make sure that all agreements are put on paper and signed by both parties, and that a title to the property recorded in your name with the county clerk.

Straw bale houses are a popular method for building a simple, affordable and green home. Straw bales offer great insulation. It is common to place the straw bales on a platform that supports the walls to prevent them from getting wet, and the exterior and interior walls that the bales form can be protected with a stucco or mud plaster. It is important to add structural supports in the walls between the straw bales. Certain municipalities and counties limit the use of this type of construction, so check with the local building authorities before proceeding.

Cob is another method of green building that makes use of a mixture of clay, sand, and straw to form earthen walls. Cob buildings can be made that have unique shapes and character. If you are in a city or highly regulated county, there are building code guidelines and limitations about what you are allowed to do with cob construction.

Some have built their homes underground, such as the earthship. Many green home builders have manipulated and designed the earthen walls around them as a protective sheild, as part of an insulation design, and for the “conditioned cave” effect. Properly designed underground construction provides several advantages, including energy savings, security, and less visibility. The only main drawback to underground construction is the possiblity for moisture intrusion such as is common in basements. A properly built and situated underground home can withstand hurricanes, tornadoes, and even nuclear events. Building underground is also used as a way to hide the true size of a home.

Some have built ceramic domes, using earthbag construction. Nader Khalili, an Iranian-American architect perfected this art, and presented it to the West. Earthbag or Super Adobe construction can be strong, efficient, and useful for budget construction projects.

In addition to these more direct approaches to green building, there are construction products currently being developed that make use of used, recycled, and sustainably produced materials. Some of these materials are better and safer than others. It is wise to fully investigate the production process for these materials before using them to construct your home. Some contain chemicals that may be harmful to your family’s health, so doing your homework on the manufacturing process is advised. » Read more: Simple Homes and Green Construction Ideas