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<br />Klein, Frank <br /> <br />From: <br />Sent: <br />To: <br />Subject: <br /> <br />Mitch Marcuson [MMarcuson@cityoffargo.com] <br />Tuesday, June 12,20072:15 PM <br />Klein, Frank <br />Odegaard.doc <br /> <br />Date: <br /> <br />June 11, 2007 <br /> <br />Subject Property: 2322 Meadow Ridge Parkway <br />~ Owner: Oak Street Apartments, LLC (Ron Odegaard) ~ <br /> <br />The owner of the subject property, Ron Odegaard, is disputing the 2007 true and full value <br />placed on the property of $486,000. The 2006 value was $298,000. <br /> <br />In 2006, all apartment properties in West Fargo were reappraised as part of a 4 year city <br />wide commercial reappraisal. The values were effective for the 2007 assessment year. <br /> <br />Since this is a mass appraisal I analyzed all apartment sales in West Fargo and also <br />Fargo. I do not believe the market is that much different between the two cities. After <br />analyzing sales I valued all properties with a cost approach which I felt fit the local <br />market. <br /> <br />In a letter to the County Commission Mr. Odegaard feels the value of his property should <br />be $208,310 based on net income. Also in this letter Mr. Odegaard suggests that the 2003 <br />income would support a value of only $90,790. <br /> <br />In January of 2003 Oak Street Apartments, LLC., purchased this property for $400,000 plus <br />assuming $6172 in unpaid special assessments for a total purchase price of $406,172. <br /> <br />In April of 2003 a building permit was taken out to build a seven stall garage. The <br />value on the permit was $34,000. The original purchase price plus value of the permit is <br />$440,172. <br /> <br />I have a sale of an apartment property in West Fargo that sold in 2003 and again in 2006. <br />Those sales indicated more than a 10% increase for 3 years. But if I add 10% to the <br />original purchase price plus the permit amount the indicated value is $484,189. <br /> <br />I have attached a list of sales to support the 2007 value. <br /> <br />Mr. Odegaard contends that the net income will not support the 2007 value. Since actual <br />income and expenses can vary widely on identical properties I like to use a Gross Income <br />Multiplier (GRM) where the gross anticipated rents are taken times a market derived <br />multiplier. Mr. Odegaard submitted a 2006 rent roll which indicated an actual rent per <br />month of $5815 or $69,780. The annual rent taken times a typical GRM of 7 indicates a <br /> <br />1 <br />