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Fair Market Value_502/504 Rhomberg AvenueT®: The Honorable Mayor and City Council Members FR®M: Michael C. Van Milligen, City Manager SUBJECT: Bee Branch Creek Restoration Project -Property owned by Michael Lindauer and Donna Lindauer at 502-504 Rhomberg ®ATE: May 13, 2009 Assistant City Attorney Tim O'Brien is recommending that the fair market value of 502- 504 Rhomberg Ave. be established at $75,000 and authorization be given to the City Attorney to commence negotiations with the property owners for purchase of the property in furtherance of the Bee Branch Creek Restoration Project. I concur with the recommendation and respectfully request Mayor and City Council approval. -Y Michael C. Van Milligen MCVM:Iw Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Tim O'Brien, Assistant City Attorney THE CITY OF ,.°°` ~ i ~~- Masterpiece o~z the Mississippi .LAMES (TIM A. ®~~FtIEN, ESQ. ASSISTANT CITY ATTORNEY To: Michael C. Van Milligen City Manager ®ATE: April 29, 2009 RE: Bee Branch Creek Restoration Project -Property owned by Michael Lindauer and Donna Lindauer at 502-504 Rhomberg In order to move ahead with acquisition of the property by eminent domain, it is necessary to have the property appraised and establish the fair market value of the property in order to make an offer to the property owner for the purchase of the property. The property has been appraised at $75,000.00. Enclosed is a resolution establishing the fair market value of the property for $75,000.00. I would request that the enclosed resolution establishing the fair market value and authorizing the City Attorney to commence negotiations with the property owner for the purchase of the property be submitted to the Mayor and City Council for consideration and approval. Enclosure cc: David Harris, Housing & Community Development Director Michael & Donna Lindauer F:\USERS\tsteckle\O'Brien\Bee Branch Creek Restoration Project\Lindauer Michael &Donna\MVM_FMVResolution0518Agenda_042909.doc OFFICE OF THE CITY ATTORNEY DUBUQUE, IOWA SUITE 330, HARBOR VIEW PLACE, 300 MAIN STREET DUBUQUE, IA 52001-6944 TELEPHONE (563) 583-8550 / FAx (563) 583-1040 / EMAIL tiobrien@cityofdubuque.org Preparer: James A. O'Brien Suite 330, Harbor View Place, 300 Main Street Dubuque, Iowa 52001 (563) 583- 8550 RESOLUTION NO. 165-09 ESTABLISHING THE FAIR MARKET VALUE OF REAL PROPERTY AT 502-504 RHOMBERG AVENUE, DUBUQUE, IOWA OWNED BY MICHAEL LUNDAUER AND DONNA LINDAUER WHEREAS, Michael Lindauer And Donna Lindauer (Owners) are the owners of the real property at 502-504 Rhomberg .Avenue legally described as follows (the Property): Lot 19 and the Northeasterly 8 feet 2 inches of Lot 20, in Srnedleys Subdivision in the City of Dubuque, Iowa, according to the recorded plats thereof and WHEREAS, the City of Dubuque (City) intends to acquire the Property for the Bee Branch Creek Restoration Project; and WHEREAS, Iowa law requires that City must make a good faith effort to negotiate with Owners to purchase the Property before proceeding with condemnation; and WHEREAS, City may not make an offer to purchase the Property which is less than the fair market value City has established for the Property; and WHEREAS, City has caused an appraisal of the Property to be made and the appraised value of the Property is $75,000.00; and WHEREAS, the City Council now desires to establish the fair market value of the Property. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DUBUQUE, IOWA AS FOLLOWS: 1. The fair market value of the Property is hereby established to be $75,000.00. 2. The City Attorney is hereby authorized to commence negotiations with the Owners of the Property and any other interested parties for the purchase of the Property for a purchase price which is not less than the fair market value established by this Resolution. Passed, approved and adopted this 18th day of May, 2009 Roy D. Buol, Mayor Attest: Jeanne F. Schneider, City Clerk __ __ 1 _~- _. , APPRAISAL OF REAL PROPERTY LOCATED AT: 502-504 Rhomberg Avenue Lot 19 & E 8.2' lot 20 Smedley's Add 502-504 Rhomberg Dubuque, IA 52001 FOR: City of Dubuque 350 West 6th Street Suite 312 Dubuque,lA 52001 AS OF: January 19, 2009 BY: Andrew G. Francois Kane Howe Appraisal Services 14858 West Ridge Lane, Suite #8 Dubuque,lowa 52003 Ph: 563-556-2068 Fax:563-557-8107 Kane Appraisal & Real Estate Services, Inc. Form GA2 - "WinTOTAL" appraisal software by a la mode, inc. - t-800-ALAMDDE Client Cit of Dubu ue File No. 09-080 Property Address 502-504 Rhomber Avenue City Dubu ue Counry Dubu ue State IA Zip Code 52001 Borrower Lindauer, Michael and Donna Form TOCNP - "WinTOTAL" appraisal software by a la mode, inc. -1-800-ALAMODE Kane Appraisal & Real Estate Services, Inc. West Ridge Business Center 14858 West Ridge Lane, Suite #8 Dubuque, Iowa 52003 Attn: Darwin Polk City of Dubuque 350 West 6th Street Suite 312 Dubuque,lA 52001 Re: Property: 502-504 Rhomberg Avenue Dubuque,lA 52001 Borrower: Lindauer, Michael and Donna File No.: 09-080 Pursuant to your request for an appraisal of the Market Value of the above-mentioned property, please be advised that we have completed said appraisal and submit it herewith. This report is a Summary Format Report, in conformance with the 2008 Uniform Standards of Professional Appraisal Practice (USPAP), This report explains and supports our opinion of the value of the subject and was prepared after an inspection of the property and its neighborhood, and an analysis of market and income data, as well as other factors deemed pertinent. As a result of our investigation, and based upon the analysis of the following data, it is our opinion that as of January 20, 2009, the Market Value of the fee simple interest in the subject property is as follows: $75,000 SEVENTY FIVE THOUSAND DOLLARS Sincerely, Andrew G. Francois SUIVIIVIARY ®F S~4LIEN7' FEAi'URES Subject Address 502-504 Rhomberg Avenue I Legal Description Lot 19 & E 8.2' lot 20 Smedleys Add 502-504 Rhomberg City Dubuque County Dubuque State IA Zip Code 52001 1 Census Tract 0005.00 lr Map Reference 20220 _ . ; Sale Price S N/A r Date of Sale N/A I Client City of Dubuque Borrower Lindauer, Michael and Donna Size (Square Feet) Price per Square Foot $ Location Urban/avg Age 138 Condition Average Total Rooms 12 Bedrooms 5 Baths 3 Appraiser Andrew G. Francois : ~ Date of Appraised Value January 19, 2009 n : Final Estimate of Value ~ 75,000 Form SSD - "WinTOTAL"appraisal software by a la mode, inc. -1-600-ALAMODE Kane Appraisal & Real Estate Services, Inc. Small Residential Income Property Appraisal Report F;IeN n9_nt;n The purpose of this summary appraisal report is to provide the lender/client with an accurate, and adequately supported, opinion of the market value of the subject property. ,Pro er Address 502-504 Rhomber Avenue Ci Dubu ue State IA Zi Code 52001 Borrower Lindauer, Michael and Donna Owner of Public Record Lindauer, Michael and Donna County Dubu ue Legal Descri lion Lot 19 & E 8.2' lot 20 Smedle 's Add 502-504 Rhomber Assessor's Parcel # 1024230011 Tax Year 2007 R.E. Taxes $ 2,105.90 Neighborhood Name Five Points Nei hborhood Ma Reference 20220 Census Tract 0005.00 Occupant ^ Owner ®Tenant ^ Vacant Special Assessments S none ^ PUD HOA $ ^ per year ^ per month " Property Rights A raised ®Fee Simple ^ Leasehold ^ Other describe Assignment Type ^ Purchase Transaction ^ Refinance Transaction ®Other (describe Ne otiations for ac uisition j Lender/Client Cit of Dubu ue Address 350 West 6th Street Suite 312 Dubu ue IA 52001 Is the subject property currently offered for sale or has it been offered for sale in the twelve months prior to the effective date of this appraisal? ^Yes ®No Re ort data sources used, offering rice s ,and dates . DMLS and owner I ^ did ^ did not analyze the contract for sale for the subject purchase transaction. Explain the results of the analysis of the contract for sale or why the analysis was not performed. N/A Contract Price S N/A Date of Contract N/A Is the property seller the owner of public record? ^Yes ^ No Data Sources Is there any financial assistance (loan charges, sale concessions, gift or downpayment assistance, etc.) to be paid by any parry on behalf of the borrower? ^Yes ^ No ° If Yes, report the total dollar amount and describe the items to be paid. none "!~'~: Race and the racial composition of the neighborhood are not appraisal factors. Neighbo~iood Charaaterlstics _ _ 2 4 Ugif Housing Trends 2-4 Uni[ Housing Present Lantl Use °~b _ocation j^ Urban ^ Suburban ^ Rural Pro er Values ^ Increasing ®Stable ^ Declinin PRICE AGE One-Unit 90 % i 3uilt-Up ®Over 75% ^ 25-75% ^ Under 25% Demand/Supply ^ Shortage ®In Balance ^ Over Supply S (000 (yrs) 2-4 Unit 5 % growth ^ Ra id ®Stable ^ Slow Marketing Time ^ Under 3 mths ®3-6 mths ^ Over 6 mths 40 Low 35 Multi-Family % ° Nelghborhood Boundaries Nei hborhood boundaries would be considered Lincoln Avenue to the north, ° 115 High 160 Commercial 5 % Garfield Avenue to the east E. 20th Street to the south and Elm Street to the west. 70 Pretl. 110 Other ° Neighborhood Description The sub'ect ro ert is located in a mixed-use net hborhood with sin le-fami ,multi-famil ,commercial and institutional t e ro ernes with ro ernes t icall avera a maintained. The sub'ect ro ert a ears to conform to the trend of the net hborhood. No detrimental influences were observed in the sub'ect net hborhood. Market Conditions (including support for the above conclusions The net hborhood consists of a mix of sin le-farm ,multi-famil and commercial. T icall ro ernes in the sub'ect net hborhood are avera e maintained. The sub ect ro ert and du lex conform to the trend of the net hborhood. No detrimental influences were observed in sub'ect net hborhood. i I Dimensions 80' x 3T Area 2,960 S .Ft. Shape Rectan ular View urban/av Specific Zoning Classification R-2A Zoning Descri lion Alternate Two-Famil Residential District Zoning Compliance ®Legal ^ Legal Nonconforming Grantlfalhered Use ^ No Zoning ^ Illegal describe Is the highest and best use of subject property as improved or as proposed per plans and specifications) the present use? ®Yes ^ No If No, describe Utilities Public Other (describe) Public Other (describe) Off-site Improvements -Type Public Private Electricity ® ^ Water ® ^ Street aved as halt ® ^ Gas ® ^ Sanitary Sewer ® ^ Alley Paved As halt-rear ® ^ FEMA Special Flood Hazard Area ^Yes ®No FEMA Flood Zone X500 FEMA Map # 1951800003B FEMA Map Date 9/6/1989 Are the utilities and/or off-site improvements ry ical for the market area? ®Yes ^ No If No, describe Are there any adverse site conditions or external factors easements, encroachments, environmental conditions, land uses, etc. ? ^Yes ®No If Yes, describe Zone X500 is inter reted as a low flood risk area. The sub'ect site is near) level to accommodate the existin home. No adverse asements or encroachments were observed. Draina e a pears ode uate to lot lines. GeneralDesi:ripiion Foundation _ ExterforDescription + materials/condition Interior materials/condition J nls ^ Two ®Three ^ hour LJ Concrete Slab ^ Crawl Space Foundation Walls Stone/avera a Floors Car et/vin I/av Accessory Unit (describe below) ®Full Basement ^ Partial Basement Exterior Walls Brick/Av Walls Dr all/av # of Stories 2 # of bldgs. 1 basement Area 1,308 sq.ft. Roof Surface As halt shin le/av Trim/Finish Wood/av Type ®Det. ^ Att. ^ S-Det./Entl Unit Basement Finish 0 % Gutters & Downs outs Metal/avera a Bath Floor Vin I/av ~ Existing ^ Proposed ^ Under Const. ^ Outside Entry/Exit ^ Sump Pump Window Type Double hun /Av Bath Wainscot Fiber lass/avq Design (Style 2-stor brick Evidence of ^ Infestation none noted Storm Sash/Insulated es/avera e Car Storage Year Built 1870 ^ Dampness ^ Settlement Screens es/average ~I None - Effective Age (Yrs) 40 Heating/Coolttag Amehlties ^ Driveway # of Cars Attic ^ None ~ FWA ^ HW86 ^ Radiant j~ Fireplaces # ^ Woodstove s # Driveway Surface ^ Drop Stair ®Stairs ^ Other Fuel nat. as ^ Patio/Deck Fence ^ ^ Garage # of Cars Floor ^ ^ Scuttle Cooling ^ Central Air Conditioning ^ Pool ^ Porch ^ Carport # of Cars " ^ Finished ^ Heated ^ Individual ^ Other ®Other none ^ Att. ^ Det. ^ Built-in ' # of Appliances Refrigerator 3 Range/Oven 3 Dishwasher Disposal Microwave Washer/Dryer 1/1 Other (describe) ? Unit # 1 contains: 6 Rooms 3 Bedrooms 1 Bath s) 1,308 Square Feet of Gross Living Area "' Unit # 2 contains: 3 Rooms 1 Bedrooms 1 Baths 654 S ware Feet of Gross Living Area Unit # 3 contains: 3 Rooms 1 Bedrooms 1 Bath(s) 654 Square Feet of Gross Living Area Unit # 4 contains: Rooms Bedrooms Baths S uare Feet of Gross Livin Area Adtll6onal features (special energy efficient Items, etc.. Sub'ect units have 100-am electrical services, and 30- anon natural as water heaters. Describe the condition of the ro er inclutlin needed re airs, deterioration, renovations, remodeling, etc.. Sub'ec[ is in avera a condition fora ro ert of its t e and a e and no needed re airs were obvious. ~ ' Freddie Mac Form 72 March 2005 Page 1 of 7 Fannie Mae Form 1025 March 2005 Form 1025 - "WinTOTAL"appraisal software by a la mode, inc. -1-800-ALAMODE Small Residential Income Property Appraisal Report File# 09-080 Are there any physical deficiencies or adverse conditions that affect the livability, soundness, or structural integrity of the property? ^Yes ®No If Yes, describe. Does the property generally conform to the neighborhood functional utility, style, condition, use, constructlon, etc. ? ®Yes ^ No If No, describe. s the ro erry sub ect to rent control? ^Yes ®Ne If Yes, describe _i I fhe following properties represent the most current, similar, and proximate comparable rental properties to the subject property. This analysis is intended to support the opinion of the market rent for the subject property. i FEATURE SUBJECT COMPARABLE RENTAL # 1 COMPARABLE RENTAL # 2 COMPARABLE RENTAL # 3 ~ Address 502-504 Rhomberg Avenue Dubu ue IA 52001 2518 Broadway Dubu ue Iowa 1697 Jackson Dubu ue Iowa 253-59 E. 14th Dubu ue Iowa Proximity to Subject 0.59 miles NW 0.32 mires SW 0.50 miles S Current Monthl Rent S 745 _ _ S 1415 ;.____ $ 1,351 _ 3 611 Rent/Gross Bldg. Area $ 0.28 sq.ft. , S 0.44 sq.fi $ 0.44 sq.ft. _ 0.36 sq.ft. Rent Control ^Yes ®No ^Yes ^ No _ ^Yes ~ No _ ^Yes ~ No Data Source(s) Owner/Pub. Rec. DMLS/Public Record DMLS/Public Record DMLS/Public Record Date of Leases Yearl Yearl Yearl Month) Location Urbanlav Urban/av Urban/av Urban/av . Actual Age 138 159 159 119 Condition Avera e Fair Fair Fair • Gross Builtlin Area 2 616 3 213 3 080 1 700 " Unit Breakdown Rm Count Size Sq. Ft. Rm Count Slze Sq. Ft. Monihly Rent Rm Count Size Sq. Ft. Monthly Rent Rm Count Size Sq. Ft. Monthly Reni Tot Br 8a 2,616 Tot Br Ba 3,213 1,415 Tot Br Ba 3,080 1,351 Tot 8r Ba 1,700 611 Unit # 1 6 3 1 1 308 4 2 1 884 $ 395 5 3 1 1 540 $ 550 5 2 1 850 $ 295 • Unit # 2 3 1 1 654 4 2 1 884 $ 395 5 3 1 770 $ 495 5 2 1 850 $ 316 j Unlt # 3 3 1 1 654 7 3 1 1 445 $ 625 3 1 1 770 $ 306 $ Unit # 4 ^~ $ g Utilities Included None None water and arba a None Analysis of rental data and support for estimated market rents for the individual subject units reported below (including the adequacy of the comparables, rental concessions, etc. Market rent fora 3-bedroom unit is $495 to $625. Market rent for a one bedroom a artment is rou hI $295- 325. Unit #2 was recent) vacated, and due to the future ac uisition b the Cit of Dubu ue the a artment is not bein marketed. - Rent Schedule: The appraiser must reconcile the applicable indicated monthly market rents to provide an opinion of the market rent for each unit in the subject property. _ _L_eq~_e5 _ aciJa,Hunls OplnLrlnl',id;h2[~Bnf _ Lease Date Per Unit Total Per Unlt Total Unit # Be in Date End Date Unfurnished Furnished Rents Unfurnished Furnished Rents 1 ear ear $ 495 S S 495 $ 495 S $ 495 2 NA NA 0 295 295 3 Year Year 250 250 295 295 4 Comment on lease data See attached Total Actual Monthly Rent $ 745 Total Gross Monthly Rent $ 1,085 ' addenda. Other Monthl Income itemize $ Other Monthly Income itemize $ Total Actual Monthly Income $ 745 Total Estimated Monthly Income $ 1,085 .. Utilities included in estimated rents ^ Electric ^ Water ^ Sewer ^ Gas ^ Oil ^ Trash collection ^ Cable ^ Other None Comments on actual or estimated rents and other monthly income including personal property The actual rents of the sub'ect ro ert 's three bedroom a artment a ears to be reasonable. Market rent fora 3-bedroom unit is $495 to $625. Unit #3 rent a ears to be below market also. Market rent '~ for a one bedroom a artment is rou hl $295-$325. Unit #2 was recent) vacated, and due to the future ac uisition b the Cit of Dubu ue the i a artment is not bein marketed. Therefor Unit #2's rent would be similar to that of Unit #3. I -I I ®did ^did not research the sale or transfer histo of the subject ro er and corn arable sales. If not, ex lain My research ^did ®did not reveal any prior sales or transfers of the subject property for the three years rior to the effective date of this appraisal. Data Sources Public Record My research ^did ®did not reveal any prior sales or transfers of the comparable sales for the year prior to the date of sale of the comparable sale. • Data Sources Public Record Report the results of the research and analysis of the prior sale or transfer history of the subject property and comparable sales (report additional prior sales on page 3 . ITEM SUBJECT COMPARABLE SALE # 1 COMPARABLE SALE # 2 COMPARABLE SALE # 3 . Date of Prior Sale/Eransier None None None 09/02/08 Price of Prior Sale/Transfer None None None $79 500 Data Sources Public Record Public Record Public Record Public Record • Effective Date of Data Sources Januar 20 2009 Januar 20 2009 Januar 20 2009 Januar 20 2009 4nalysis of rior sale or transfer history of the subject property and comparable sales No sale or tansfer of sub'ect in ast three ears. Corn arable #3 sold on 09/02/08 for an indicated rice of $79 500 which a ears to be an arm's ten th transaction. i J J Freddie Mac Form 72 March 2005 Page 2 of 7 Fannie Mae Form 1025 March 2005 Form 1025 -"WinTOTAL" appraisal software by a la made, inc. -1-800-ALAMODE Small Residential Income Property Appraisal Report F;,P~ pg_pgp There are 6 comparable properties currently offered for sale in the subject neighborhood ranging In price from $ 34,000 to $ 79,900 there are 0 com arable sales in the subject neighborhood within the past twelve months ranging in sale price from $ 0 to $ 0 FEATURE SUBJECT COMPARABLE SALE # 1 COMPARABLE SALE # 2 COMPARABLE SALE # 3 4tltlress 502-504 Rhomberg Avenue ~ I~, Dubu ue, IA 5200.1_ 2518 Broadway Street Dubu ue, Iowa 1697 Jackson Street Dubu ue, Iowa 755 University Avenue Dubu ue, Iowa 'ro>ami to Sub'ect 0.59 miles NW 0.32 m iies SW 1.09 miles SW Tale Price $ N/A _ I $ 90.000 _ S 90 000 S 88,000 Sale Price/Gross Bldg. Area $ sq.ft. $ 28.01 s .ft ~ $ 29.22 sq ft 5 35.26 sq.it.1 3ross Monthly Rent i Gross Rent Multi tier Price er Unit $ 1,085 $ $ 1,415 63.60 $ 30,000 ___ $ 1,351 ~ 66.62 .__ $ 30,000 S 1 025 85.85 _ $ 44,000 Price er Room $ $ 6 000 $ 6 9231 $ S 000 Price per Bedroom $ $ 12,857 `_ $ 12,857 S 17,600 !Rent Control n Yes 6'.I No ^ Yes ®No ^ Yes ®No _ ^ Yes ®No - ' Data Sources Ins ect/Exterior Ins ect/Exterior Ins ect/Exterior i Verification Sources _. DMLS/ Public Record DMLS/Public Record DMLS/ Public Record VALUE ADJUSTMENTS DESC7IP I10' DESCRIPTION + - Adjustment DESCRIPTION + -) Atl~ustment DESCRIPTION + - Adjustment Sale or Financing Concessions None None Seller received a fnancin fee -7,500 Date of Sale/Time 11/11/08 04/29/08 09/03/08 j Location Urban/av Urban/Av Urban/Av Urban/av Leasehold/Fee Sim le Fee Sim le Fee Sim le Fee Sim le Fee Sim le Site 2,960 S .Ft. 24,896 s .ft. -5,000 5,100 s .ft. -2,500 5,300 s .ft. -2,500 View Urban/av Urban/Av Urban/av Urban/av Design Style) 2-stor brick 2-stor brick 2-stor brick 2-stor brick Quali of ConsVuction Avera e Avera e Avera e Avera e Actual Age 138 159 119 129 • Condition Avera e Avera e Avera e Avera e Gross Building Area Unit Breakdown 2,616 Total Bdrms Baths 3,213 Total Bdrms Baths -7,164 3,080 Total Bdrms Baths -5,568 2,496 Total Bdrms Baths +1,440 Unlt # 1 6 3 1 4 2 1 5 3 1 6 2 1 • Unit # 2 3 1 1 4 2 1 5 3 1 5 3 1 ° Unit # 3 3 1 1 7 3 1 3 1 1 Unit # 4 Basement Description 1,308 S .Ft. Partial/OP Full/0 % FuIIlO% r Basement Finished Rooms None None None None ~ Functional Utility Avera e Avera e Avera e Avera e j Heating/Cooling GFA/none GFA/CA -3 500 GFA/none Steam/none Energy Efficient Items Avera e Avera e Avera e Avera e 'arking On/Off Site 3 on-site 1car attached +2 000 3 on-site 2 on-site +1 000 i'orch/PaliO/Deck Porch 2 orches/deck -2,000 2- orches/ atio -2,000 2- orches/deck/f -5,500 UetAdjustment(Total ^+ ®- $ -15,664 ^+ ®- $ -10,068 ^+ ®- $ -13,060 Adjusted Sale Price of Comparables Net Adj. 17.4 % Gross Atlj. 21.8 % $ 74,336 Net Adj. 11.2 % Gross Atlj. 11.2 % $ 79,932 Net Atlj. 14.8 °~ Gross Adj. 20.4 % $ 74,940 1 Adjusted Price Per Unil Indi sP oomPru orcomp umr>i $ 24 779 $ 26 644 ~ 3 37 470 AdjustetlPricePerRoominarsncomPrnorcomPaoomsl $ 4,956 $ 6,149, , $ 6813 jAdusiedPricePerBedrmtadi_secomur#orcomnaaa~o°ms I $ 10,619 _ $ 11,4191 $ 14988.. Value per Unit $ 25,000 X 3 Units = $ 75,000 Value per GBA $ 30 X 2,616 GBA = $ 78,480 Value er Rm. $ 6 500 X 12 Rooms = $ 78 000 Value er Bdrms. $ 14 000 X 5 Bdrms. _ $ 70 000 Summary of Sales Comparison Approach including reconciliation of the above indicators of value. The sub'ect ro ert was com ared to 2 similar tri lexes and 1 du lex. A $12/S .ft. size $3 500 central air $1 000 on-stie arkin s ace $2 000 er orch/ atio/deck $1 500/f re lace and a $2,000/ ara a ad'ustments were made based on market data. A site size ad'ustment was made also where deemed a ro riate. The estimated sub ect Market Value herein $77 000 calculates to $29.436/S .Ft. which is within the actual sale rice er s .ft. ran e of the com arables and deemed a ro riate based on sub'ect location, ualit ,condition and overall market a eat. Indicated Value by Sales Comparison Approach $ 77,000 Total gross monthly rent $ 1,085 X gross rent multiplier GRM 67.281 = $ 73,000 Indicated value by the Income Approach Comments on income a roach inclutlin reconciliation of the GRM The GRM of 67.281 is based on an anal sis of the com arable sales and the income ° a roach usin a ca italization method. See the income a roach a raiser's comments . ) Indicated Value by: Sales Comparison Approach $ 77,000 Income Approach $ 73,000 Cost Approach (if developed) $ NA This is a Summar A raisal Re ort. The costa roach was not anal sed herein due to de reciation and obsolescence. The sale com orlon and income a roach were anal sed herein. The estimated values b each a roach were iven wei ht in the fnal analsis. The final estimate of value is $75 000. This appraisal is made ®"as is", ^ subject to completion per plans and specificatlons on the basis of a hypothetical condition that the improvements have been • completed, ^ subject to the following repairs or alterations on the basis of a hypothetical condition that the repairs or alterations have been completed, or ^ subject to the following required inspection based on the extraordinary assumption that the condition or deficiency does not require alteration or repair: ~° ~ Based on a complete visual inspection of the interior and exterior areas of the subject property, defined scope of work, statement of assumptions and limiting conditions, and appraiser's certification, my (our) opinion of the market value, as defined, of the real property that is the subject of this report is S 75,000 ,as of Januar 19, 2009 ,which is the date of ins ection and the effective date of this a raisal. Freddie Mac Form 72 March 2005 Page 3 of 7 Fannie Mae Form 1025 March 2005 Form 1025 - "WinTOTAL"appraisal software by a la made, inc. - t-800-ALAMOOE Oman nesjaentjaj income wr®perty Wppraisai report File# 09-080 COST APPRDACH TO VALUE (not required by Fannie Mae) } Provide adequate inbrmation for Ine ienderjclient to replicate the below cost figures and calculations. Su ort for the o inion of site value summary of com arable land sales or other methods for estimatin site value ESTIMATED ^ REPRDDUCTION OR ^ REPLACEMENT COST NEW OPINION OF SITE VALUE ______ _$ ;Source of cost data DWELLING Sq.Ft. @ ~ _$ Quality rating from cost service Effective date of cost data S .Ft. @ $ _$ Comments on Cost Approach (gross living area calculations, depreciation, etc. _$ Garage/Car ort 5 .Ft. @ ~ _$ Total Estimate of Cost-New =~ ' Est ^iated Remalning Econemlc Llfe (HUD and VA only) ;developer/builder in control of the Homeowners' Associal ,,,.,de the following intormation for PUDs ONLY if the develop Legal Name of Project Total number of phases Total number of Total number of units rented Total number of Was the project created by the conversion of e>asting building s Does the roject contain any multi-dwelling units? ^ Yes Are the units, common elements, and recreation facilities compl Ore the common elements leased to or by the Homeowners' As `I Describe common elements and recreational facilities. Years VINDICATED VALUE BY COST APPROACH .....____. PROJECT INFORMATION FOR PUDs (if applicable) rn (HOAj? ^ Yes 'I_ No Unitrype(s) [~ Detached ^ Attached /builder is in control of the HOA and the subject properly is an apached dwellir nits Total number of units sold nits for sale Data source(s) into a PUD? ^ Yes ^ No If Yes, date of conversion. ^ No Data Source e? ^ Yes ^ No If No, describe the status of completion. iciation? n Yes I I No If Yes. describe the rental terms and ootians. Freddie Mac Form 72 March 2005 Page 4 of 7 Fannie Mae Form 1025 March 2005 Form 1025 - "WinTOTAL"appraisal software by a la mode, inc. -1-800-ALAMODE Small Residential Income Property Appraisal Report Fileyt 09-080 This report form is designed to report an appraisal of a two- to four-unit property, including atwo- to four-unit property in a planned unit development (PUD). A two- to four-unit property located in either a condominium or cooperative project requires the appraiser to inspect the project and complete the project information section of the Individual Condominium Unit Appraisal Report or the Individual Cooperative Interest Appraisal Report and attach it as an addendum to this report. This appraisal report is subject to the following scope of work, intended use, intended user, definition of market value, statement of assumptions and limiting conditions, and certifications. Modifications, additions, or deletions to the intended use, intended user, definition of market value, or assumptions and limiting conditions are not permitted. The appraiser may expand the scope of work to include any additional research or analysis necessary based on the complexity of this appraisal assignment. Modifications or deletions to the certifications are also not permitted. However, additional certifications that do not constitute material alterations to this appraisal report, such as those required by law or those related to the appraiser's continuing education or membership in an appraisal organization, are permitted. SGQ'['E of ~QC~K: The scope of work for this appraisal is defined by the complexity of this appraisal assignment and the reporting requirements of this appraisal report form, including the following definition of market value, statement of assumptions and limiting conditions, and certifications. The appraiser must, at a minimum: (1) perform a complete visual inspection of the interior and exterior areas of the subject property, (2) inspect the neighborhood, (3) inspect each of the comparable sales from at (east the street, (4) research, verify, and analyze data from reliable public and/or private sources, and (5) report his or her analysis, opinions, and conclusions in this appraisal report. fNTE6~fQEQ [LSE: The intended use of this appraisal report is for the lender/client to evaluate the property that is the subject of this appraisal for a mortgage finance transaction. ~[~TENQEQ IfSEFI: The intended user of this appraisal report is the lender/client. QEEGNGTCQG~ ~1F G4llIARC~ET V6~LQIE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he or she considers his or her own best interest; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U. S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. *Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to financing terms offered by a third party institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the financing or concession but the dollar amount of any adjustment should approximate the market's reaction to the financing or concessions based on the appraiser's judgment. STATEG~EV~T QF ASSU'~lCyT~oG~~ ANQ L~~OTIG~~ ~fUG~IQIT@oC~3: The appraiser's certification in this report is subject to the following assumptions and limiting conditions: 1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to it, except for information that he or she became aware of during the research involved in performing this appraisal. The appraiser assumes that the title is good and marketable and will not render any opinions about the title. 2. The appraiser has provided a sketch in this appraisal report to show the approximate dimensions of the improvements, including each of the units. The sketch is included only to assist the reader in visualizing the property and understanding the appraiser's determination of its size. 3. The appraiser has examined the available flood maps that are provided by the Federal Emergency Management Agency (or other data sources) and has noted in this appraisal report whether any portion of the subject site is located in an identified Special Flood Hazard Area. Because the appraiser is not a surveyor, he or she makes no guarantees, express or implied, regarding this determination. 4. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand, or as otherwise required by law. 5. The appraiser has noted in this appraisal report any adverse conditions (such as needed repairs, deterioration, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject property or that he or she became aware of during the research involved in performing this appraisal. Unless otherwise stated in this appraisal report, the appraiser has no knowledge of any hidden or unapparent physical deficiencies or adverse conditions of the property (such as, but not limited to, needed repairs, deterioration, the presence of hazardous wastes, toxic substances, adverse environmental conditions, etc.) that would make the property less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, this appraisal report must not be considered as an environmental assessment of the property. 6. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that the completion, repairs, or alterations of the subject property will be performed in a professional manner. Freddie Mac Form 72 March 2005 Page 5 of 7 Fannie Mae Form 1025 March 2005 Form 1025 - "WInTOTAL" appraisal software by a Ia mode, inc. -1-800-ALAMODE ,mall I~eslaentlal Income wroper>y Hppralsal Deport Pile 7i 09-080 ,4FP'~1,4GSEb~°~ ~ERTIF6~,~LIQ~I: The Appraiser certifies and agrees that: 1. I have, at a minimum, developed and reported this appraisal in accordance with the scope of work requirements stated in this appraisal report. 2. I performed a complete visual inspection of the interior and exterior areas of the subject property, including all units. I reported the condition of the improvements in factual, specific terms. I identified and reported the physical deficiencies that could affect the livability, soundness, or structural integrity of the property. 3. I performed this appraisal in accordance with the requirements of the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place at the time this appraisal report was prepared. 4. I developed my opinion of the market value of the real property that is the subject of this report based on the sales comparison and income approaches to value. I have adequate market data to develop reliable sales comparison and income approaches to value for this appraisal assignment. I further certify that I considered the cost approach to value but did not develop it, unless otherwise indicated in this report. 5. I researched, verified, analyzed, and reported on any current agreement for sale for the subject property, any offering for sale of the subject property in the twelve months prior to the effective date of this appraisal, and the prior sales of the subject property for a minimum of three years prior to the effective date of this appraisal, unless otherwise indicated in this report. 6. I researched, verified, analyzed, and reported on the prior sales of the comparable sales for a minimum of one year prior to the date of sale of the comparable sale, unless otherwise indicated in this report. 7. I selected and used comparable sales that are locationally, physically, and functionally the most similar to the subject property. 8. I have not used comparable sales that were the result of combining a land sale with the contract purchase price of a home that has been built or will be built on the land. 9. I have reported adjustments to the comparable sales that reflect the market's reaction to the differences between the subject property and the comparable sales. 10. I verified, from a disinterested source, all information in this report that was provided by parties who have a financial interest in the sale or financing of the subject property. 11. I have knowledge and experience in appraising this type of property in this market area. 12. I am aware of, and have access to, the necessary and appropriate public and private data sources, such as multiple listing services, tax assessment records, public land records and other such data sources for the area in which the property is located. 13. I obtained the information, estimates, and opinions furnished by other parties and expressed in this appraisal report from reliable sources that I believe to be true and correct. 14. I have taken into consideration the factors that have an impact on value with respect to the subject neighborhood, subject property, and the proximity of the subject property to adverse influences in the development of my opinion of market value. I have noted in this appraisal report any adverse conditions (such as, but not limited to, needed repairs, deterioration, the presence of hazardous wastes, toxic substances, adverse environmental conditions, etc.) observed during the inspection of the subject property or that I became aware of during the research involved in performing this appraisal. I have considered these adverse conditions in my analysis of the property value, and have reported on the effect of the conditions on the value and marketability of the subject property. 15. I have not knowingly withheld any significant information from this appraisal report and, to the best of my knowledge, all statements and information in this appraisal report are true and correct. 16. I stated in this appraisal report my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the assumptions and limiting conditions in this appraisal report. 17. I have no present or prospective interest in the property that is the subject of this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or opinion of market value in this appraisal report on the race, color, religion, sex, age, marital status, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property or on any other basis prohibited by law. 18. My employment and/or compensation for performing this appraisal or any future or anticipated appraisals was not conditioned on any agreement or understanding, written or otherwise, that I would report (or present analysis supporting) a predetermined specific value, a predetermined minimum value, a range or direction in value, a value that favors the cause of any party, or the attainment of a specific result or occurrence of a specific subsequent event (such as approval of a pending mortgage loan application). 19. I personally prepared all conclusions and opinions about the real estate that were set forth in this appraisal report. If I relied on significant real property appraisal assistance from any individual or individuals in the performance of this appraisal or the preparation of this appraisal report, I have named such individual(s) and disclosed the specific tasks performed in this appraisal report. I certify that any individual so named is qualified to perform the tasks. I have not authorized anyone to make a change to any item in this appraisal report; therefore, any change made to this appraisal is unauthorized and I will take no responsibility for it. 20. I identified the lender/client in this appraisal report who is the individual, organization, or agent for the organization that ordered and will receive this appraisal report. Freddie Mac Form 72 March 2005 Page 6 of 7 Fannie Mae Form 1025 March 2005 Form 1025 - "WinTOTAL" appraisal software by a la mode, inc. -1-800-ALAMODE anion ncaruCUUar uwunrc riuNeny riNNraraat nGNurt Piief{ o9-oso 21. The lender/client may disclose or distribute this appraisal report to: the borrower; another lender at the request of the borrower; the mortgagee or its successors and assigns; mortgage insurers; government sponsored enterprises; other secondary market participants; data collection or reporting services; professional appraisal organizations; any department, agency, or instrumentality of the United States; and any state, the District of Columbia, or other jurisdictions; without having to obtain the appraiser's or supervisory appraiser's (if applicable) consent. Such consent must be obtained before this appraisal report may be disclosed or distributed to any other party (including, but not limited to, the public through advertising, public relations, news, sales, or other media). 22. I am aware that any disclosure or distribution of this appraisal report by me or the lender/client may be subject to certain laws and regulations. Further, I am also subject to the provisions of the Uniform Standards of Professional Appraisal Practice that pertain to disclosure or distribution by me. 23. The borrower, another lender at the request of the borrower, the mortgagee or its successors and assigns, mortgage insurers, government sponsored enterprises, and other secondary market participants may rely on this appraisal report as part of any mortgage finance transaction that involves any one or more of these parties. 24. If this appraisal report was transmitted as an "electronic record" containing my "electronic signature," as those terms are defined in applicable federal and/or state laws (excluding audio and video recordings), or a facsimile transmission of this appraisal report containing a copy or representation of my signature, the appraisal report shall be as effective, enforceable and valid as if a paper version of this appraisal report were delivered containing my original hand written signature. 25. Any intentional or negligent misrepresentation(s) contained in this appraisal report may result in civil liability and/or criminal penalties including, but not limited to, fine or imprisonment or both under the provisions of Title 18, United States Code, Section 1001, et seq., or similar state laws. Sf~PEF~VISO'RY APPRA(SEff~"S, l~Ed~l[FI~ATI I~'N: The Supervisory Appraiser certifies and agrees that: 1. I directly supervised the appraiser for this appraisal assignment, have read the appraisal report, and agree with the appraiser's analysis, opinions, statements, conclusions, and the appraiser's certification. 2. I accept full responsibility for the contents of this appraisal report including, but not limited to, the appraiser's analysis, opinions, statements, conclusions, and the appraiser's certification. 3. The appraiser identified in this appraisal report is either asub-contractor or an employee of the supervisory appraiser (or the appraisal firm), is qualified to perform this appraisal, and is acceptable to perform this appraisal under the applicable state law. 4. This appraisal report complies with the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and that were in place at the time this appraisal report was prepared. 5. If this appraisal report was transmitted as an "electronic record" containing my "electronic signature," as those terms are defined in applicable federal and/or state laws (excluding audio and video recordings), or a facsimile transmission of this appraisal report containing a copy or representation of my signature, the appraisal report shall be as effective, enforceable and valid as if a paper version of this appraisal report were delivered containing my original hand written signature. APPf~A9SEfft Signature ~' , , ~ ~_;-~ Name Andrew G. Francois ~~ ~ + Company Name Kane Appraisal Services Company Address 14858 West Ridge Lane Suite #8 Dubuque la 52003 Telephone Number (563) 556-2068 Email Address kappraisal(a~yousq.net Date of Signature and Report March o2, 2009 Effective Date of Appraisal January 20, 2009 State Certification # CGO2869 or State License # or Other (describe) State # State IA Expiration Date of Certification or License 6/30/2008 ADDRESS OF PROPERTYAPPRAISED 502-504 Rhomberg Avenue Dubuaue.lA 52001 APPRAISED VALUE OF SUBJECT PROPERTY$ 75,000 LENDER/CLIENT Name City of Dubuque Housing Company Name City of Dubuque Company Address 350 West 6th Street Suite 312 Dubuque IA 52001 Email Address jpatters(a)cityofdubuque.orq SflfRERVISO'6tY RPFRAOSE6i u;ONP.Y IF fftEQQlId~EQ) Signature Name Company Name Company Address Telephone Number Email Address Date of Signature State Certification # or State License # State Expiration Date of Certification or License SUBJECT PROPERTY ^ Did not inspect subject property ^ Did inspect exterior of subject property from street Date of Inspection ^ Did inspect interior and exterior of subject property Date of Inspection COMPARABLE SALES ^ Did not inspect exterior of comparable sales from street ^ Did inspect exterior of comparable sales from street Date of Inspection Freddie Mac Form 72 March 2005 Page 7 of 7 Fannie Mae Form 1025 March 2005 Form 1025 - "WinTOTAL" appraisal software by a la mode, inc. -1-800-ALAMODE Operating Income Statement One- to Four-Family Investment Property and 'two- to Four-Family Owner-Occupied Property Property Address Street 502-504 Rhomberg Avenue City Dubuque State IA Zip Code 52001 ~eu~era9 InstrrcctBcrots: This form is to be prepared jointly by the loan applicant, the appraiser, and the lender's underwrites The applicant must complete the following schedule indicat- ing each unit's rental status, lease expiration date, cu«ent rent, market rent, and the responsibility for utility expenses. Rental figures must be based on the rent for an "unfurnished" unit. Currently Expiration Current Rent Market Rent Paid Paid Rented Date Per Month Per Month Utility Expense By Owner By Tenant Unit No. 1 Yes ~ No ~ yearly $ 495 $ 495 Electricity-_..-_-_--.. ^ Unit No. 2 Yes ~ No ~ 5 $ 295 Gas--__-_----_---.. ^ UnitNo.3 Yeses Nom yearly $ 250 $ 295 FuelDil__-_----_.--- ^ ^ UnitNo.4 Yes Q No ~ $ $ Fuel (Other)-..._. _._--_ ^ Totall $ 745 $ 1,085 Water/Sewer ^ Trash Removal---__--- ^ The applicant should complete all of the income and expense projections and for existing properties provide actual year-end operating statements for the past two years (far new properties the applicant's projected income and expenses must be provided). This Operating Income Statement and any previous operating statements the applicant provides must then be sent to the appraiser for review, comment, and/or adjustments next to the applicant's figures (e.g. ApplicanUAppraiser 288/300). If the appraiser is retained to complete the form instead of the applicant, the lender must provide to the appraiser the aforementioned operating statements, mortgage insurance premium, HOA dues, leasehold payments, subordinate financing, and/or any other relevant information as to the income and expenses of the subject property received from the applicant to substantiate the projections. The underwriter should carefully review the applicant's/appraiser's projections and the appraiser's comments concerning those projections. The underwriter should make any final adjustments that are necessary to more accurately reflect any income or expense items that appear unreasonable for the market. (Real estate taxes and insurance on these types of properties are included in PITT and not calculated as an annual expense item.) Income should be based on the current rents, but should not exceed market rents. When there are no current rents because the property is proposed, new, or currently vacant, market rents should be used. Avtivtiora~0 alTaaaTa ~nm ExjoeuTS~ P~a~aatcaut fair l~f~xt ~ 2 ~aatEus Adjustments by Income (Do not include income for owner-occupied units) By ApplicanUAppraiser Lender's Underwriter Gross Annual Rental (from unit(s) to be rented)-----_-_..--_--_---------__-------._---__--- ~ 13,020 $ Other Income (include sources) ----.-- __-__ _--- _ + + Total --- - $ 13,020 $ Less Vacancy/Rent Loss - - -- - - _ - 521 ( 4 %) - ( °~) Effective Gross Income-------------_---__---------------------------------- - - g 12,499 S Expenses (Do not include expenses for owner-occupied units) Electricity .._.. - ..... - Gas - - -- - - - Fuel Oil Fuel _ - (TYPe ) Water/Sewer - -- - - -- - --- Trash Removal _- Pest Control - - - - - - - Other Taxes or Licenses - - - _ - Casual Labor This includes the costs for public area cleaning, snow removal, etc., even though the appllcani may not elect to contract for such services. Interior PainUDecoratin0 - - - This includes the costs of contract Tabor and materials that are required to maintain the interiors of the living unit. General Repairs/Maintenance 1,000 This includes the costs of contract labor and materials that are required to maintain the public corridors, stairways, roofs, mechanical systems, grounds, etc. Management Expenses - - - - - 500 These are the customery expenses that a professional management company would charge to manage the property. Supplies _ - This includes the costs of items like light bulbs, janitorial supplies, etc. Total Replacement Reserves -See Schedule on Pg. 2--_-.. _. - 670 Miscellaneous Insurance - ... - - _ - - 950 Property Taxes_ _ ___._ 2,105 Total Operating Expenses _.... -- - S 5,225 $ Freddie Mac Form 998 Aug 88 Fannie Mae Form 216 Aug 88 Page 1 of 2 Kane Appraisal & Real Estate Services, Inc. Form INC - "WinTOTAL" appraisal software by a la mode, inc. - t-800-ALAMODE Repfacettile¢tt Resemre S~heduE~ Hueyuate ie iaceinem ieseives nmsr ue caicmareu ieyaiwess m wnemer actual reserves are provieee ror on the owner s operanng sta[emen[s or are customar m the mcai marxet. i ms represents t e total average yearly reserves. Generally, all equipment and components that have a remaining life of more than one year-such as refrigerators, s Dues, clothes washers/ dryers, trash compactors, furnaces, roofs, and carpeting, etc. -should be expensed on a replacement cost basis. Equ€punent ttegalacean~nt 6tearaining Oest D_[fe 6}yAppt6cant/ Leaden Agipza6san Adpastresents Stoves/Ranges------...-- .__- @ $ 300 ea. / 10 Yrs. x 3 Units = S 90.00 $ Refrigerators.----------- --_- @ S 400 ea. / 10 Yrs. z 3 Units = $ 120.00 $ Dishwashers_ _____ __ _ _____ @ $ ea. / Yrs. x Units = $ $ A/C Units----------------- ----- @ $ ea. / Yrs. x Units = $ $ C. Washer/Dryers-------- -_--. @ $ 400 ea. / 10 Yrs. x 1 Units = $ 40.00 $ HW Heaters------------- ___ @ $ 300 ea. / 20 Yrs. x 3 Units = S 45.00 $ Furnace(s)..--_--_---_ -__ @ $ 1,500 ea. / 12 Yrs. x 3 Units = $ 375.00 $ (Other)-_--__---__---_ .-._- @ $ ea. / Yrs. x Units = $ $ Roof ...... @ $ / Yrs. x One Bldg. _ $ _ _ $ Garpeting~ (Wall to Wall) Remaining Life (Units) Total Sq. Yds. @ S Per Sq. Yd. / Yrs. _ $ $ (Public Areas) Total Sq. Yds. @ $ Per Sq. Yd. / Yrs. _ $ $ Fuatal 6£epEacerne¢tt 9tesecves. QEnten an R~. fy $ 670 S ~'pera~t(u~g ~ttca~T~ Et~~art~aajatuau~ S 12,499 - $ 5,225 = $ 7,274 / 12 =$ 606 Effective Gross Income Total Operating Expenses Operatng Income Monihly Operating Income ~ 606 - $ 0 = $ 606 Monthly Operating Income Monthly Housing Expense Net Cash Flow (Note: Monthly Housing Expense includes principal and Interest on the mortgage, hazard insurance premiums, real estate taxes, mortgage insurance premiums, HOA dues, leasehold payments, and subordinate financing payments.) Underwriter's instructions for 2-4 Family Owner-Occupied Properties • If Monthly Operating Income is a positive number, enter as "Net Rental Income" in the "Gross Monihly Income" section of Freddie Mac Form 65/Fannie Mae Form 7003. If Monthly Operating Income is a negative number, it must be included as a liability for qualification purposes. • The borrower's monthly housing expense-to-income ratio must be calculated by comparing the total Monthly Housing Expense for the subject property to the borrower's stable monthly income. Underwriter's instructions for 1-4 Family Investment Properties • If Nei Cash Flow is a positive number, enter as "Net Rental Income" in the "Gross Monthly Income" section of Freddie Mar; Form 65/Fannie Mae Form 1003. If Net Cash Flow is a negative number, it must be included as a liability for qualification purposes. • The borrower's monthly housing expense-to-income ratio must be calculated by comparing the total monthly housing expense for the bo«ower'sprimary residence to the borrower's stable monthly income. Appraiser's Comments (Including sources far data and rationale for the projections) The subject duplex has one vacancy and therefore a 4 % vacancy factor was estimated herein. Contrary to form instructions, the taxes & insurance are included as expense items to appropriately estimate a net operating income (NOI). The estimated NOI of $7,272 was capitalized at 10.0 % OAR, $7,272/.10 = $72,720, say $73,000. The estimated cap rate (OAR) of 10.0% was derived from market data analyzing comparable sales. A 66.35 gross rent multiplier is estimated as a result of the analysis herein ($73,000 estimated value divided by $1,085 per month gross income = 67.28). Andrew G. Francois rj,~ / r'ti '" ~, , t.~!-_,._~ r j ~ c .~ March 02, 2009 Appraiser Name Appraiser Signature Date Underwriter's Comments and Rationale for Adjustments Underwriter Name Underwriter Signature Date Freddie Mae Fannie Mae Form 998 Aug 88 Form 216 Aug 88 Page 2 of 2 Form INC - "WinTOTAL" appraisal software by a la mode, inc. -1-800-ALAMODE DEFINITION OF MARKET VALUE: The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stlmulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (f) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and each acting in what he considers his own best interest; (3) a reasonable time is allowed far exposure in the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions* granted by anyone associated with the sale. * Adjustments to the comparables must be made for special or creative financing or sales concessions. No adjustments are necessary for those costs which are normally paid by sellers as a result of tradition or law in a market area; these costs are readily identifiable since the seller pays these costs in virtually all sales transactions. Special or creative financing adjustments can be made to the comparable property by comparisons to tinancing terms offered by a third parry institutional lender that is not already involved in the property or transaction. Any adjustment should not be calculated on a mechanical dollar for dollar cost of the tinancing or concession but the dollar amount of any adjustment should approximate the market's reaction to the tinancing or concessions based on the appraiser's judgement. STATEMENT OF LIMITING CONDITIONS AND APPRAISER'S CERTIFICATION CONTINGENT AND LIMITING CONDITIONS: The appraiser's certification that appears in the appraisal report is subject to the following conditions: 1. The appraiser will not be responsible for matters of a legal nature that affect either the property being appraised or the title to i1. The appraiser assumes that the title is good and marketable and, therefore, will not render any opinions about the title. The property is appraised on the basis of it being under responsible ownership. 2. The appraiser has provided a sketch in the appraisal report to show approximate dimensions of the improvements and the sketch is included only to assist the reader of the report in visualizing the property and understanding the appraiser's determination of its size. 3. The appraiser has examined the available flood maps that are provided by the Federal Emergency Management Agency (or other data sources) and has noted in the appraisal report whether the subject site is located in an identified Special Flood Hazard Area. Because the appraiser is not a surveyor, he or she makes no guarantees, express or implied, regarding this determination. 4. The appraiser will not give testimony or appear in court because he or she made an appraisal of the property in question, unless specific arrangements to do so have been made beforehand. 5. The appraiser has estimated the value of the land in the cost approach at its highest and best use and the improvements at their contributory value. These separate valuations of the land and improvements must not be used in conjunction with any other appraisal and are invalid if they are so used. 6. The appraiser has noted in the appraisal report any adverse conditions (such as, needed repairs, depreciation, the presence of hazardous wastes, toxic substances, etc.) observed during the inspection of the subject properly or that he or she became aware of during the normal research involved in performing the appraisal. Unless otherwise stated in the appraisal report, the appraiser has no knowledge of any hidden or unapparent conditions of the property or adverse environmental conditions (including the presence of hazardous wastes, toxic substances, etc.) that would make the property more or less valuable, and has assumed that there are no such conditions and makes no guarantees or warranties, express or implied, regarding the condition of the property. The appraiser will not be responsible for any such conditions that do exist or for any engineering or testing that might be required to discover whether such conditions exist. Because the appraiser is not an expert in the field of environmental hazards, the appraisal report must not be considered as an environmental assessment of the property. 7. The appraiser obtained the information, estimates, and opinions that were expressed in the appraisal report from sources that he or she considers to be reliable and believes them to be true and correct. The appraiser does not assume responsibility for the accuracy of such items that were furnished by other parties. 8. The appraiser will not disclose the contents of the appraisal report except as provided for in the Uniform Standards of Professional Appraisal Practice. 9. The appraiser has based his or her appraisal report and valuation conclusion for an appraisal that is subject to satisfactory completion, repairs, or alterations on the assumption that completion of the improvements will be performed in a workmanlike manner. 10. The appraiser must provide his or her prior written consent before the lender/client specified in the appraisal report can distribute the appraisal report (including conclusions about the property value, the appraiser's identity and professional designations, and references to any professional appraisal organizations or the firm with which the appraiser is associated) to anyone other than the borrower; the mortgagee or its successors and assigns; the mortgage insurer, consultants; professional appraisal organizations; any state or federally approved financial institution; or any department, agency, or instrumentality of the United States or any state or the District of Columbia; except that the lender/client may distribute the property description section of the report only to data collection or reporting service(s) wi(hout having to obtain the appraiser's prior written consent. The appraiser's written consent and approval must also be obtained before the appraisal can be conveyed by anyone to the public through adver65ing, public relations, news, sales, or other media. Freddie Mac Form 439 6-93 Page 1 of 2 Fannie Mae Form 1004B 6-93 Kane Appraisal & Real Estate Services, Inc. Form ACR - "WinTOTAL" appraisal software by a la mode, inc. -1-800-ALAMODE APPRAISER'S CERTIFICATION: The AppraisereertifiesandagreesthaC 1. I have researched the subject market area and have selected a minimum of three recent sales of properties most similar and proximate to the subject property for consideration in the sales comparison analysis and have made a dollar adjustment when appropriate to reflect the market reaction to those items of significant variatlon. Ii a significant item in a comparable property is superior to, or more favorable than, the subject property, I have made a negative adjustment to reduce the adjusted sales price of the comparable and, if a significant item in a comparable property is inferior to, or less favorable than the subject property, I have made a positive adjustment to increase the adjusted sales price of the comparable. 2. I have taken into consideration the factors that have an impact on value in my development of the estimate of market value in the appraisal report. I have not knowingly withheld any significant information from the appraisal report and I believe, to the best of my knowledge, that all statements and information in the appraisal report are true and correct. 3. I stated in the appraisal report only my own personal, unbiased, and professional analysis, opinions, and conclusions, which are subject only to the contingent and limiting conditions specified in this form. 4. I have no present or prospective interest in the property that is the subject to this report, and I have no present or prospective personal interest or bias with respect to the participants in the transaction. I did not base, either partially or completely, my analysis and/or the estimate of market value in the appraisal report on the race, color, religion, sex, handicap, familial status, or national origin of either the prospective owners or occupants of the subject property or of the present owners or occupants of the properties in the vicinity of the subject property. 5. I have no present or contemplated future interest in the subject property, and neither my current or future employment nor my compensation for performing this appraisal is contingent on the appraised value of the property. 6. I was not required to report a predetermined value or direction in value that favors the cause of the client or any related party, the amount of the value estimate, the attainment of a specific result, or the occurrence of a subsequent event in order to receive my compensation and/or employment for performing the appraisal. I did not base the appraisal report on a requested minimum valuation, a specific valuation, or the need to approve a specific mortgage loan. 7. I performed this appraisal in conformity with the Uniform Standards of Professional Appraisal Practice that were adopted and promulgated by the Appraisal Standards Board of The Appraisal Foundation and chat were in place as of the effective date of this appraisal, with the exception of the departure provision of those Standards, which does not apply. I acknowledge that an estimate of a reasonable time for exposure in the open market is a condition in the detinition of market value and the estimate I developed is consistent with the marketing tlme noted in the neighborhood section of this report, unless I have otherwise stated in the reconciliation section. 8. I have personally inspected the interior and exterior areas of the subject property and the exterior of all properties listed as comparables in the appraisal report. I further certify that I have noted any apparent or known adverse conditions in the subject improvements, on the subject site, or on any site within the immediate vicinity of the subject property of which I am aware and have made adjustments for these adverse conditions in my analysis of the property value to the extent that I had market evidence to support them. I have also commented about the effect of the adverse conditions on the marketability of the subject property. 9. I personally prepared all conclusions and opinions about the real estate that were set forth in the appraisal report. If I relied on significant professional assistance from any individual or individuals in the performance of the appraisal or the preparation of the appraisal report, I have named such individual(s) and disclosed the specific tasks performed by them in the reconciliation section of this appraisal report. I certify that any individual so named is qualified to perform the tasks. I have not authorized anyone to make a change to any item in the report; therefore, if an unauthorized change Is made to the appraisal report, I will take no responsibility for it. SUPERVISORY APPRAISER'S CERTIFICATION: If a supervisory appraiser signed the appraisal report, he or she certifies and agrees that: I directly supervise the appraiser who prepared the appraisal report, have reviewed the appraisal report, agree with the statements and conclusions of the appraiser, agree to be bound by the appraiser's certifications numbered 4 through 7 above, and am taking full responsibility for the appraisal and the appraisal report. ADDRESS OF PROPERTY APPRAISED: 502-504 Rhomberg Avenue Dubuque IA 52001 APPRAISER: SUPERVISORY APPRAISER (only if required): Signature< ,!` _,tlb f ~ti '~ ~ ~ Signature: Name: Andrew G. Francois Name: Dale Signed: March 02, 2009 Dale Signed: State Certification #: CG02869 State Certification #: or State License #: or State License #: State: IA State: Expiration Date of Certification or License: 6/30/2008 Expiration Date of Certification or License: ^ Did ^ Did Not Inspect Property Freddie Mac Form 439 6-93 Page 2 of 2 Fannie Mae Form 70048 6-93 Form ACR - "WinTOTAL" appraisal software by a la mode, inc. -1-800-ALAMODE Supplemental Addendum File No. 09-080 Client Cit of Dubu ue Property Atldress 502-504 Rhomber Avenue City Dubu ue Counry Dubu ue State IA Zip Code 52001 Borrower Lindauer, Michael and Donna • Small Income The two leases that are in place are year to year according to the owner. Copies of the leases were not made available to the appraiser. Farm TADD - "WinTOTAL" appraisal software by a la made, inc. -1-600-ALAMODE Subject Photo Page Client Cit of Dubu ue Property Address 502-504 Rhomber Avenue City Dubu ue Counry Dubu ue State IA Zip Code 52001 Borrower Lindauer, Michael and Donna _- _ --- __ Subject Front '" '' __ _ _ 502-504 Rhomberg Avenue - _ _ Sales Price: N/A GBA: 2,616 j Age: 138 ~~ ~ l r .~ ~, . - _ i _~ Subject Rear ~+,~-_; Subject Street >' , i Rental Photo Page ~_~ I _ __ ~«~.r w...vi ....ii,-..t. _ - _ Form OLSTRNT.DL$C - "WinTOTAI" appraisal software by a la mode, inc. -1-800-ALAMODE Rental 1 2518 Broadway Prox. to Subj, 0.59 miles NW GBA 3,213 Age/Year Blt. 159 Rental 2 1697 Jackson Prox. to Subj. 0.32 miles SW GBA 3,080 Age/Year BIL 159 Rental 3 253-59 E. 14th Prox. to Subj. 0.50 miles S GBA 1,700 Age/Year BIL 119 Form PIC4x6.CC - "WinTDTAL" appraisal sofhvare by a la mode, inc. -1-800-ALAMODE Comparable 1 2518 Broadway Street Sales Price: 90,000 GBA: 3,213 Age: 159 Comparable 2 1697 Jackson Street Sales Price: 90,000 GBA: 3,080 Age: 119 Comparable 3 755 University Avenue Sales Price: 88,000 GBA: 2,496 Age: 129 Comparable Photo Page Plat Map Client Cit of Dubu ue Property Address 502-504 Rhomber Avenue City Dubu ue County Dubu ue State IA Zip Code 52001 Borrower Lindauer, Michael and Donna '~.. ~`: . ~~`ti:, i ~' 1, ~~ /'% f ,'' ~~ ,. ~~t. b2d23UDi fir, /~ ~~~ ~ `~ ._~- ~ ~: -~,` '~ , ~:t ., ~ / Gopyr'yht(c}2D98.Dubuque County, IA. ~ ~ f ~~ Form MAP.PLAT - "WinTOTAL" appraisal software by a la mode, inc. -1-800-ALAMDDE Rental Map Client Cit of Dubu ue Property Address 502-504 Rhomber Avenue City Dubu ue County Dubu ue Stale IA Zip Code 52001 Borrower Lindauer, Michael and Donna a l~ mo~~, Inc` -- ~ , ~ ~ :; n7e le ura~, ct.~i~r,ak.,. r, .at; is-.~. _ ~. ~. ~ - '~c: ~ ,~. ,~, 7r vary: st - Pso'c F'oii:[ P: r. ~ ~ ti ~ IS PoYm E ` I - J: -- -, s, Fi~. ,_~ C _ gal ,L ..r.;J .. ,. r 4 .~ -n _ A ~~' v 1, `t _ t L : y a : ~ ~ c ~.~ 1 - - ~,, ti.. , h, ,, ~ ' t ~ f - e.' ~: ,; ~ , ,,,, ~~ I. f _ , ~ _ ~ t, Y -- _. ~+ 4 ~ + S i z u -~ ~ -_ I _ ~.! ' _ _ _ '"~` :, _ , ~ Eas[Cluhuque ~, ._ ~ ~ s 52 ~ F ~i h I ,.I .~ n n ' 2e a ;~ r -'~e. ~ za , N.,~ ~ - ';t ~~ ....,, r '. ' - ~ n b w _ _ ~ _ ~. - ~r, ~_ - .. ~.. v Oubuquc ~' ~ - - ~t - h1k ,cok` ~ :C i L l~ 4j f~~IaS ~ virt~„Ik7rth'" - ~.Ilir 1, - 757'. `.i.,ol:~~lf fi.. Io f=-' °~, 1.7 Form MAP.LOC - "WinTOTAL" appraisal software by a la mode, inc. -1-800-ALAMODE Comparable Sales I-Aap Client Cit of Dubu ue Property Address 502-504 Rhomber Avenue City Dubu ue County Dubu ue State IA Zip Code 52001 Borrower Lindauer, Michael and Donna Form MAP.LOC - "WinTOTAI" appraisal software by a la mode, inc. -1-800-ALAMODE Building Sketch Client Cit of Dubu ue Property Address 502-504 Rhomber Avenue City Dubu ue County Dubu ue State IA Zip Code 52001 Borrower Lindauer, Michael and Donna COV PORCH ENCL PC]RCH ~tas~ ~ns~ 1z t~ z~ to to 2 2 2sBFi1BFULL [1348 30 30 31 Sketch by wwtu.camauisicn.com Form SKT.BIdSkI -"WinTOTAL" appraisal software by a la mode, inc. -1-860-ALAMODE Flood 11~ap Client Cit of Dubu ue Property Address 502-504 Rhomber Avenue City Dubu ue County Dubu ue State IA Zip Code 52001 Borrower Lindauer, Michael and Donna 7YZA1G 5C ',l - FLOQDSCAPE ,, ' F Ha~rds Map i \ i I 'Map Number ' '~ ~I19518000038 -` - _ +, t 1 j Effective Oate ' Septernher 6,1989 1 .... ~' 1 ~rn t L _ _ I f ,,. ~ ~„~ ~ Powered by Flood Source LZ L .._-.~- I - - -:,:!I .-.~,~"--.: ..^ _ 877.77.FL006 ` ~ ~~ .. ~ _ ...- ---- --. :L__- ©1999-2809 Source Prose and/or Flood Source Corporations. FII rights reserved. Paterrts 8,831,328 and 8,878,615. Ether patents pending. For Info: info~floodsource.com. Form MAP.FLOOD - "WinTOTAL"appraisal software by a la mode, inc. -1-800-ALAMODE