Real Estate Appraisal
and
Time Management
Calvin Cummings, MAI
Cummings Appraisal Group, Inc.
Calvin Cummings, MAI
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1983-1988: Cushman & Wakefield
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1988-1998: CB Richard Ellis
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1998-2002: Unicity International
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2002-2002: LoopNet
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2002-2008: Cummings Appraisal Group, Inc.
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Founder, Editor, Publisher, CB Richard Ellis
National Investor Survey, 1991-1997
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Appraised properties totaling in excess of
100 million Sq.Ft. and $10 billion since 1983
An Introduction to
Real Estate Appraising
Calvin Cummings, MAI
Cummings Appraisal Group, Inc.
Appraiser
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Definition:
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“One who is expected to perform valuation services
competently and in a manner that is independent,
impartial, and objective.” 1
Uniform Standards of Professional Appraisal Practice (USPAP)
The Valuation Process
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Define the Appraisal Problem
Determine Scope of Work
Collect Data & Describe Property
Analyze Data
Estimate Land Value
Apply Applicable Approaches to Value
Reconcile Value Indications
Report Final Value Conclusion
The Appraisal Report
Definition of the Problem
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Identify Client & Intended Users
Intended Use of Appraisal
Purpose of Appraisal & Definition of Value
Date of Opinion of Value
Identify Property Characteristics
Extraordinary Assumptions
Hypothetical Conditions
Scope of Work
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Extent Property is Identified
Extent Property is Inspected
Type and Extent of Data Researched
Type and Extent of Analysis Applied
Data Collection & Property Description
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Market Area Data:
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Subject Property Data:
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Region, City & Neighborhood Data
Apartment, Industrial, Office & Retail Market Data
Land, Improvements, Personal Property, etc.
Comparable Property Data:
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Cost and Depreciation
Sales, Listings, Offerings
Income, Vacancy, Expenses, Cap Rates, etc.
Data Analysis
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Market Analysis:
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Market Study
Marketability Study
Highest and Best Use Analysis:
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Site As Though Vacant
Property As Improved
Land Value Opinion
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Sales Comparison
Extraction
Allocation
Subdivision Development
Land Residual
Ground Rent Capitalization
Apply Applicable Approaches to Value
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Cost
Sales Comparison
Income Capitalization
Cost Approach
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Select One of Two Possible Cost Bases:
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Estimate Costs Using 1 of 3 Techniques:
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Comparative-Unit, Unit-In-Place, or Quantity Survey
Estimate Depreciation (1 of 3 Methods):
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Replacement or Reproduction Cost
Age-Life, Market Extraction, or Breakdown
Depreciated Value of Improvements
Add Contributory Value of Site Improvements
Add Land Value (Based on H&B Use as Vacant)
Cost Approach
Sales Comparison Approach
Research & Verify Sales Data:
 CoStar:
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Loopnet:
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Property For Sale or Lease, Recent Sales
Multiple Listing Services:
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COMPS, Commercial MLS, Property Professional
i-Tech MLS, TheMLS, MRMLS, MLSAlliance
RealQuest.com, RENTV.com, LABJ, etc.
Appraisers, Brokers, Sellers, Buyers
Sales Comparison Approach
Comparative Analysis:
 Real Property Rights Conveyed
 Financing Terms
 Conditions of Sale
 Expenditures Made Immediately After Purchase
 Market Conditions (Time)
 Location
 Physical Features
 Economic Characteristics
 Use (Zoning)
 Non-Realty Components of Value
Sales Comparison Approach
Sales Comparison Approach
Income Capitalization Approach
Income & Expense Analysis:
 Contract Rent (Lease Analysis)
 Market Rent (Comparable Lease/Rental Survey)
 Potential Gross Rental Income (PGRI)
 Other Income (Reimbursements & Misc. Income)
 Potential Gross Income (PGI)
 Vacancy & Credit Loss Allowance (V&CL)
 Effective Gross Income (EGI)
 Operating Expenses (Expense Analysis)
 Net Operating Income (NOI)
 Tenant Improvement Costs & Leasing Commissions
 Annual Cash Flows & Reversionary Value
Income Capitalization Approach
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Direct Capitalization:
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Convert single year’s income
Divide Net Income by Cap Rate
Multiply Gross Income by GIM
Yield Capitalization / DCF Analysis:
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Forecast Annual Cash Flows & Reversion
Discount Cash Flows with Yield Rate
Income Capitalization Approach
Reconciliation of Value Opinions
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Dependability/Applicability of Each Approach
Variations/Differences Among Indications
Weighting of Value Indications
Final Value Conclusion:
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Single-Point Estimate
Value Range
The Appraisal Report
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Standards (USPAP, Appraisal Institute)
Report Options:
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Self-Contained Appraisal Report
Summary Appraisal Report
Restricted Use Appraisal Report
Types of Reports:
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Oral Reports
Form Reports (URAR, 71-A, 71-B, etc.)
Narrative Reports
The Appraisal Report
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Title Page
Letter of Transmittal
Table of Contents
Summary
Appraisal/Report Type
Assumptions
Purpose/Intended Use
Value Date/Definition
Property Rights Appraised
Scope of Work
Property Identification
History of Property
Location Data
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Site Description / Zoning
Improvement Description
Taxes & Assessment Data
Market Analysis
Highest and Best Use Analysis
Land Valuation
Cost Approach
Sales Comparison Approach
Income Capitalization Approach
Reconciliation
Estimate of Exposure Time
Qualifications of Appraiser
Addenda
Questions
Calvin Cummings, MAI
Cummings Appraisal Group, Inc.
Time Management
“Life is Not a Dress Rehearsal”
Calvin Cummings, MAI
Cummings Appraisal Group, Inc.
Time Management - Why & How?
Live a Balanced Life
 Gross a Successful Business
Allows You to Achieve Your Dreams
 Set Goals, Plan, Prioritize & Execute
 Project & Task Management
 Getting Organized
 Taming the “Paper Tiger”
 Managing E-mail
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A Balanced Life
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Spiritual
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Intellectual
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Emotional
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Physical
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Family
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Professional
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Financial
Time Management Books
Growing a Successful Business
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Leadership
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Management
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Strategic Marketing
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Lead Generation
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Lead Conversion
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Client Fulfillment
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Accounting & Finance
Achieving Your Dreams
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# 1 - Set Goals
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For each life or work area
S pecific
M easurable
A ttainable
R ealistic
T imely
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# 2 - Create a Plan
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# 3 - Take Action!
“A Goal Without a Plan
is only a Dream”
“If You Fail to Plan,
You’re Planning to Fail”
“A Journey of a Thousand Miles
Starts with but a Single Step”
Planning – Using an Outline
Create a Hierarchical Outline:
 Level 1: Personal & Business
– Level 2: Result Areas or Roles
 Level 3: Goals
– Level 4: Projects
 Level 5: Tasks
Planning – A Work Example
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Work
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Sales (Salesperson)
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Goal: I’ve personally earned $50,000 in commissions in 2Q08 by
selling 3 of my investment property listings totaling $1,700,000
and qualified for the Top 5, $25,000 Bonus Pool by July 1st. I feel
tremendous confidence achieving goals I set for myself and I feel
so relaxed after taking a luxurious 2-week cruise to Hawaii.
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Project 1: Generate 300 qualified leads by 3/31/08
 Task 1: Order title co list of apt bldg owners in SFV area
 Task 2: Send list to PrintPros to do direct mail campaign
 Task 3: Have Assistant contact 20 owners per day
Managing Projects & Tasks
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Let Assume:
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8 Result Areas or Roles x 5 Goals = 40 Goals
40 Goals x 3 Projects = 120 Projects ! ! !
120 Projects x 3 Tasks = 360 Tasks ! ! !
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How do you manage all these tasks?
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Prioritize Projects & Tasks
Prioritizing
Pareto Principle
20% of Efforts = 80% of Results
FranklinCovey ABC-123
Prioritization Scheme
Stephen Covey
Time Management Matrix
Simplify & Focus
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Simplify Your To-Do List
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Focus on Top 3-5 Projects
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List only Next Actions (NAs)
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Work on One Thing at a Time
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Avoid Procrastination
Procrastination
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Break large projects into
smaller manageable tasks
What is the one Next Action
that moves Project forward?
Eat That Frog, by Brian Tracy
Feel The Fear and Do It
Anyway, by Susan Jeffers
Planning Tools
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Planners (FranklinCovey, Time/Design)
Swift To-Do List
OneNote & Outlook
Outlook with Business Contact Manager
AchievePlanner
Time/Design Planner
Swift To-Do List
OneNote & Outlook 2007
Outlook 2007 with BCM / MOA
Achieve Planner
Daily vs. Weekly Planning
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Tyranny of the Urgent
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Quadrant II Focus
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Big Rocks
“The Key is not to prioritize what’s on your schedule
but to schedule your priorities”
Weekly Planning - AchievePlanner
Weekly Planning - PlanPlus Online
Weekly Planning - Planner Pad
Weekly Planning - Outlook 2007
Get Organized
Invest in the right equipment:
– Hanging & Manila File Folders
– Rolling File for Active Projects
– Vertical File Holders & 3-Ring Binders
– Brother P-touch labeler
– Dymo LabelWriter
– CardScan (Business Cards)
– Xerox DocuMate 252 Duplex Scanner
– PDA/Smartphone
Desktop Supplies
Inbox, Round & Rolling File
Wire Incline Files Holder
Binders in Vertical File Holder
Active Projects Filing System
Archive File Storage Cabinets
Labeler & Scanner
Knowledge Worker Workstation
Bookcase for Books & Notebooks
Shelving System for Office Supplies
Clear Plastic Storage Containers
Metal Holders for Supplies
Taming the Paper Tiger
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Make list of areas to organize & prioritize
Make list of equipment/materials & buy
Set up organization systems in your office
Purge/throw away unwanted materials
File active projects in short-term projects area
File archive materials in long-term file area
Use Inbox as one and only collection point
Process Inbox twice daily
Stop stacking and start filing
Outlook Email Best Practices
Time Management Summary
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Look at All Areas of Your Life
Set Goals, Plan, Prioritize & Execute
Simplify Your Project & Task Lists
Start Using Weekly Planning
Focus & Overcome Procrastination
Get Organized
Master Your Paper Inbox
Learn How to Master Your E-mail Inbox
Questions
Calvin Cummings, MAI
Cummings Appraisal Group, Inc.