Evening Star Newspaper, November 2, 1929, Page 17

'EARNING CAPACITY URGED AS BASIS FOR APPRAISAL) Haphazard System Now in Use Is Declared Barrier to Prospective Investors in Real Estate Mortgages. BY DON S. WARREN. Appraisals .of income-producing properties for mortgage bond purposes should be based primarily on earnings rather than on| reproduction valuations, Preston M. Nolan of Chicago, widely known | veteran real estate appraiser, told 500 delegates attending the conven- tion of the Mortgage Bankers’' Association of America, held this week gt New Orleans, La. Mr. Nolan predicted that some of the “lambs” trying to make easy money in the stock market would invest in real estate and realty mortgages if more appraisers would follow this method, based on the Bank of England system. More people have not invested in real estate and in real estate gecurities in the past, he said, because of the “haphazard” manner in which appraisals were made. This situation has changed, however, he added, and accurate forecasts have replaced offhand opinions. ‘Mr. Nolan, who has made more than 25,000 real estate appraisals running into billions of dollars in the last quar- ter century, declared that the Bank of Fngland system of appraising the value of income-producing properties had ‘built up a regard for realty investments in Great Britain that has been enjoyed for generations. Scores “Guessograph” System. The speaker scored real estate valu- ations based on the “guessograph” and said that fortunes can be made in com- mercial properties built and operated to produce steady, lasting, dependable income. > In predicting for the future greater public confidence with the more univer- sal employment of more scientific and conservative appraisal methods, the vet- eran appraiser said, according to in- formation received from the Mortgage Bankers' Assoclation: “Universities lndh s(honl“!\ of l‘::l;- merce throughout the couniry are - ing courses in'the Bank of England system, and this shertly will put out of business the horse-trading real estate brokers or the peddler of inflated se- curities. “No counting of bricks can laugh off the vital essential of earnings. Don't let any one tell you that earnings are impossible of accurate forecast. In- come types, of course, Vary as to de- sirability; some are more dependably calculatable than others. Many factors enter .into the equation—size and strength of the city, choice of location, class of property and, finally, almost equaling everything else in importance, the management ability of the institu-| ¢ tion to which is intrusted the financial happiness of the property owner. Appraisals Should Be Proven. “An appraisal that cannot be under- stood u})dl, proven is not an appraisal. Anything less, in most instances, war- rants suspicion on the part of the in- vestor either in real estate itself or in the bonds for wl:lé:h it is sometimes de the unjustified excuse.” m‘suund nppéainng must take into con- #ideration the highest and best use of income property in order to develop maximum ground value and must also consider conservative financing and smortization than c’n be met with cer- tainty, said Mr. Nolan. 'r'n{ speaker admitted, however, that, in spite of his formuld, appraising can never be reduced to a “Robot” operation due to the importance of individual judgment, but such judgment, based on ‘scientific research, differs from the opinions that were often accidents when they were right in the past. he said. Here is Mr. Nolan's plan: 1. Determine maximum rent producer. 2. Estimate cost of imp;ove}x:;;r:‘tl; 3. Rent value space and sc! 3 4. Work out opentfinl budget, fixed es and vacany allowance. Ch;rz Set up gg fund requirement amort] nnl.urtll dissipation of in- ent principal. ve;’.mned\l& wpepr:ung cost, vacancy al- Jowance and sinking fund requirement Trom rent schedule. There remains the true net return on the capital invest- ment. A italize the “true net” at the nZe I'S:gggzed as standard for the par- ticular class nn;! quality of property der consideration. Im"mm the ‘justified capital invest- ment’ deduct building or furnishings. and there remains the intrinsic or earn- ue of the land,” he states. I A bookkeeping, an exnct balance must exist. Every step of the work is open to individual proof by qualified expert—land, building and furnishings: Tent value of space, operating cost, fixed charges, probable vacancy and life of butlding and contents. NEW BUILDING SHOWS DROP IN BALTIMORE| Permits Granted in September Rep- resent Decrease of 30 Per Cent for Year Ago. Bpecial Dispatch to The Star. BALTIMORE, November ~2.—Con- tracts awarded for new building and engineering work in Baltimore in Sep- tember totaled $3,270,800, according to a report of the building inspector’s office. This is a decrease of less than 1, of 1 per cent from the figures of August, 1929, but a 30 per cent loss from Septembr, 1928. The principal items of interest in last | | | | | | WASHINGTON, D. C, MARKET COLLAPSE 10 AID MORTGAGES Luchs Predicts Increased In- vestments in Real Estate as Result of Sethack. The successive waves of selling which recently hit the stock market, driving thousands of investors from that field, will bring added interest of investors to real estate and realty mortgage bonds, it was predicted by Morton J. Luchs, realtor, in an address this week | before the sales managers’ section of the Washington Real Estate Board. Declaring that increased business is actively under way, Mr. Luchs said that he had personal knowledge of several transactions concluded in the past few | days, raging in amounts running into thousands of dollars. which were con- summated as a direct result of recent severe reactions on the stock market. Bought With Market Money. In each instance refbrred to, he said, the investor had withdrawn cash from e stock market and purchased busi- ness properties or other types of real estate in Washington. There is no question, he said, that & large number of persons had suffered substantial losses in savings and invest- ments in stock market dealing. There are others, he added, who had actually given up their places of employment to enjoy the apparent great earnings they were making, but who now will be forced to seek jobs. The result of all this, he asserted, would be a tendency on the part of many stock investors to settle down, get regular employment and begin to save. Funds thus accumulated, he continued, would seek new investments and much of it would be turned logically to real estate and first mortgages secured by real estate. Profit Is Held Certain. Mr. Luchs stated that “every one who invests in real estate and holds it long enough is bound to realize a profit, and ‘Washington real estate, in my opinion, offers more safety and satisfaction than any other city in the country, simply because it is the seat of the National Government. Tax Study Projected. The New York State Association of Real Estate Boards in session at its an- nual convention recently at Syracuse authorized a bill to be spondered by the association at the next session of the Legislature to provide for a legislation commission, made up of members of the Senate and Assembly and represent- atives of the 21 taxable interests in the State, to study all tax laws, paying par- ticular attention to the fact that New York State has more provisions for tax | exemptions than any other State in the Union. . Realtors Enroll Owners. The Detroit Real Estate Bodrd is tak- ing steps to reorganize its property owners' division to enroll Detroit prop- erty owners with realtors in the =olu: tion of their mutual problem—obtain: ing more equitable property taxes and equalization of tax expenditures. Leon- ard P. Reaume, president-elect of the National Association of Real Estate is general chairman of the ommittee in charge of the reorgani- zation of property owners in Detroit. ——— Tomorrow On the front page of the real estate section of the Washing- ton Post we will have an un- usual announcement of a home offered for sale in the Wesley Heights section. Modern Treatment Features Colonial Dwelling Sturtevant Home at Kalorama Circle Offers Contrast. GARDEN DESIGNED ON FORMAL LINES Central Hall Plan Used in House Makes for Roomy Structure. The large, rather formal dwelling at 86 Kalorama circle, recently purchased and occupied by Mr. and Mrs. William North Sturtevant, is of colonial archi- tectural lines of modern treatment. The | house is featured by large windows framed in white, which gives striking | contrast against the brick facades, an interesting and inviting colonial en- | trance, dormers projecting prominently from the front section of the roof and double chimneys rising above either side of the house. The property was acquired from the william A. Hill Co., builders, through | the agency of Moore & Hill, Inc. The | consideration was reported at approxi- mately $105,000. Garden Is Formal. The formal aspect of the house is carried out in the garden development in the rear yard, which is given privacy by the employment of a_tall, rustic fence to shield the view of the garden. A four-car garage forms the rear of the yard, and marking the inner wall of this building is a small stone recessed fountain. ‘The central motif of the garden is a pool surrounded by flagstones, banked on either side by flowering plants and ringed by an edge of boxwood shrub- bery. There is a flagstone terrace im- mediately ldjomlni the rear of the house, where are located the library and dining rooms. In the rear of the house also are a play yard and a dog kennel. A 'bright appearance is lent the | dwelling by the white finish given the shutters and framework of the win- dows and entrance. House of Center Hall Plan. ‘The house is of the center hall plan. On the first floor are living room, li- brary, dining room, kitchen, butler’s pantry, servant’s sitting room, vanity and guest lavatory. The dining room is finished in sugar pine. Paneled walls are a feature of some of the rooms. ‘There are on the second floor four master-size bedrooms, three baths and a den or small library. On the top floor are two additional bedrooms and bath as well as three servants’ rooms and bath, which are segregated from the rest of the quarters on this floor. ‘Thres of the bedrooms are fitted with fireplaces. The den is finished in sugar pine paneling and fitted with built-in bookcases. AMERICA DECLARED “LAND OF MUSEUMS” Architectural Director Sees Estab- lishment of Working Lab- oratories. America has become a land of muse- ums, declares Louis La Beaume, a di- rector of the American Institute of Architects. “At the rate we are pro- gressing,” he predicts, “it won't be very long before America will be one vast museum, a gigantic storehouse of all the art of all the ages.” ‘The range of American department stores, “which stock everything from hickory shirts to houseboats,” Mr. La Beaume asserts, is as nothing compared to that of our museums. “Having begun,” he says, “with the more easily portable objects, picture, sculpture, bric-a-brac and furniture, we are now busily prying out stones from their foundations, and carting home cloisters and chapels, monas- teries, Mudejar ceilings, oaken beams and paneling, rejas and reredoses; and are even casting covetous eyes on the cathedrals and castles of which these things were a part. “But the day of mere pedantry in the museum will pass. Museums are being humanized and made use of by people who come not to gape, but to under- stand, which means to appreciate “The museum of the future will be a working laboratory, not only for prigs and savants, but for men and | women and children; and it often will | Tour Thursday Will be Con-| be more than that: it will bear a record of man’s struggle and development and be a treasure house of his nlghest:&fl achievement.” Massacruserrs Park ‘West of Kalorama -Across Rock Creek. Mass. Ave. entrance at 30™ St. One Square east of New British Embassy The National Cathedral on west The Foening WITE SUNDAY WORNTNG EDITION New residence at 86 Kalor: ama Circle, purchased by Mr. and Mrs. William North Sturtevant. VIRGINIANS HOSTS T0D.C. REALTORS cluded With Dinner at Golf | and Country Club. Washington realtors will be enter- tained by nearby Virginia realtors next Thursday in a tour of Northern Vir- ginia, which will end with a dinner at the Washington Golf and Country Club, according to a special announcement sent to the membership by John A. Petty, executive secretary, Washington Real Estate Board. s, A formal invitation was extended by the Alexandria, Arlington, Fairfax Real Estate Board to the executive committee of the Washington Board. The circular describing the outing, which was dis- tributed to the local realtors and their associates, pointed out that nearby Vir- ginia is a growing factor in the future of the National's Capital and that the tour arranged by the Virginia realtors would give the local realtors an op- riunity to become acquainted with acts about this part of the metropolitan area, which is reported to have a popu- lation of nearly 100,000. The plan for the development of the Virginia approach to the National Capi- tal with the co-operation of the Na- tional Capital Park and Planning Com- mission was referred to as an incident of importance to real estate brokers and salesmen in Washington. The local realtors will assemble at a central point and accompany the Vir- ginia_delegation on a tour which will include historic Alevandria, with its modern developments and industrial life; Washington Masonic Memorial, Arlington Memorial Bridge approaches, Mount Vernon Memorial Highway, Lee Boulevard, Virginia Palisades, residen- tial communities and major industrial centers. It is expected that the tour will be completed by 5:30, and the party will | have a brief period at the country club | before the dinner starts at 6 o'clock. Facilities at the club have made it necessary to limit the attendance of the Washington realtors to 100, and those who do attend will be issued per- sonal guest cards. Mr. Petty stated that | reservations received today indicate that the limit will be met quickly. Fenwicks Buy New Home. Mr. and Mrs. Charles Fenwick have purchased the Dutch Colonial dwelling | at 2011 Quincy street northeast, Wood- | ridge, D. C. it is announced by the Woodridge Realty Co. This home, one the newer ones in the section, was it by A. E. Bellman. Business Bureau Directors Approve Real Estate Code ‘The board of directors of the Better Business Bureau has ap- proved in principle the proposed real estate license law and has ap- pointed a committee to co-operate with the Washington Real Estate Board in urging the enactment of this or similar legislation. Joshua Evans, jr., chairman of the board of the bureau, named R. H. B. Lyon, attorney for the bureau: H. L. Rust and Howard Moran as members of this committee, SMALL SHOP LEASED. Florists Will Occupy © by 18 Foot Store. Space for a small shop at 609 Twelfth street, measuring 9 by 18 feet, has been leased by the Cash and Carry florists for a period of 10 years at a total rental figure of $30,000, it is announced by H. Clifford Bangs, who negotiated the transaction. Peoples Drug Stores, In Greeks File Protest. ATHENS, November 2 (#).—The gov- ernment yesterday made formal protest to Angora in connection with the com- plaint of Greek shipping companies in Constantinople that Turkish authorities were hindering the passage of Greek vessels through the Dardanelles to the Black Sea contrary to the terms of the Dardanelles agreement. The Greek government was said to be considering protesting also to the League of Nations. Clementson Buys Home. V. E. Clementson has purchased the new dwelling at 3756 Benton street, Glover Park, it is announced by B. H. Gruver, developer. The house is of English _design, containing six and bath. i o oo The property was leased from the c. APPRAISAL BODY NAMED BY LAWSON President of Real Estate Board Holds Committee’s Functions Are Important. The appraisal committee of the | Washington Real Estate Board to serve during the coming year will consist of Harold E. Doyle, vice president of Thomas J. Fisher & Co.; Joseph I. Wel- ler; H. L. Rust, jr, vice president of H. L. Rust Co.; E. Quincy Smith; Claud Livingston, president of Willlam H. Saunders & Co.; C. A. Jones, vice pres- ident of Shannon & Luchs; Waverly 11;1-ylor. president of Waverly Taylor, c. Alfred H. Lawson, president of the board, pointed out that the appraisal committee is considered the most im- portant committee of the board and the members thereof are selected an- nually by the executive committee :or:lc;l is the governing body of the rd. Membership on this committee, Mr. Lawson said, is considered a high honor by the local realtors and the work of | the committee is not only important but interesting. ‘During the period that the board has conducted this appraisal work its committees have been called on to make appraisals of many impor- tant real estate projects, including aisals for the National Capital Park and Planning Commission in connec- tion with properties for which negotia- tions were being made or contemplated. The settlement, partitioning and adjust- ment of estates involving real property, Mr. Lawson indicated, presented not only intricate problems, but those of a type that were extremely inter- esting to analyze. | Next week the appraisal committee will meet and organize by electing 1ts| own chairman and formulate plans for this special service of the board which is handled solely by the committee, | 3300 1704 Conn. Ave. A Corner Center-Hall Residence in English ¥illage Cleveland‘ Ave. (Intersection 33rd & Cathedral) VACANT i A Tlovely center-hall corner brick home—plus con- venience of location and proper environment. Adjacent to the Cathedral and but a moment's walk from two of Washington’s finest public schools. Wonderfully landscaped lot with combined frontage of 208 feet. Open Saturday and All Day Sunday Schwab, Valk & Canby IS OBJECT lated Under Prov grehenslve in scope. dealings are specifically defined. These wrong practices and improper acts enumerated in the law, when com- mitted by any licensee will serve as the basis for a formal complaint to be filed with the Res Estate Commission against the licensee in question. They also supply the commission itself with a definite basis to proceed on its own in- itiative, when in its judgment any licensee should be summoned to appear before the commission in a formal hear- ing to answer for his conduct. Section 8 of the proposed license law sets up the following specific acts which will serve as a basis for a hearing to determine whether a license should be suspended or revoked: Making any substantial misrepresentation; making any false promises of a character likely to influence, persuade or induce; pur- suing a continued and flagrant course of misrepresentation, or making of false promises through agents or salesmen, or advertising or otherwise; acting for more than one party in a transaction without the knowledge of all parties for whom he acts; accepting a com- mission or valuable consideration as a real estate salesman for the perfor- mance of any of the acts specified in is law from any person, except his employer, who must be a licensed real estate .broker; representing or attempt- ing to represent a real estate broker other than the employer without the employer; falling, within a reasonable time, to account for or to remit any moneys coming into his posssssion which belong to others; being unworthy or incompetent to act as a real estate broker or salesman in such manner as to safeguard the interests of the public: paying a commission or valuable con sideration to any person for acts or se. performed in violation of this law; or any other conduct, whether of the same or a different character from that hereinbefore specified, which con- stitutes improper, fraudulent or dishon- est dealing. All of the prohibited acts described in the law are fundamental in char- S Exhibit Home 1327 KALMIA ROAD 750 Potomac 0830 express knowledge and consent of the | gtaf' SATURDAY, NOVEMBER 2, 1929. [ HOME & GARDEN | 17 CURB ON IMPROPER ACTS OF NEW BILL Conduct of Real Estate Brokerage Business Is Regu- ions of Pending Measure. BY JOHN A. PETTY, Becretary Washington Real Estate Board. Elimination of improper acts by real estate brokers and real estate salesmen in the ordinary practice of real estate is the fundamental aim of the pending real estate brokers’ license law. proposed law one of the provisions designed to accomplish this pur- pose is written so clearly and specifically that there can be no doubt or misunderstanding as to this fundamental purpose of the law. One section of the law contains a definite set-up, broad and com- It embraces practically all acts of real estate rokers and real estate salesmen in the conduct of a real estate brokerage business which do not measure up to the basic standards of honesty, integrity and fair dealing set out in the application which must be filed with the commission before any license can be issued. Ten distinct acts of commission or omission in respect to real estate In framing the acter. They not only cover fraudulent or dishonest practices, but also include incompetency of a type that does not offer proper safeguard to the interests of the public. The average layman who buys, sells, exchanges or rents real estate is usually quite unfamiliar with the significance (Continued on Nineteenth Page.) New corner residence in Cleveland Park <> § 3314 PORTER ST. (Cor. 34th) — — Open Sunday and daily until nine p.m. AL Sans! < Owners—Builders EVERAL new completed residences in Washing- ton's foremost development of moderately priced homes are ready for your inspec- tion. Prices $18750 up . . . Exhibit home open daily and Sunday until nine pm. To reach, drive out to end of 16th, turn right on Kal- mia Rd., or out Alaska Ave. and turn left on Kalmia. Two Already Sold A ac,,‘cansfiury CWN‘Y INC. Owners—Builders 1418 Eye St. N.W. Nat'l 5904 Sites for Individual Homes Priced from *L%0 per sq.ft. ub Within 2 miles of White House Location and contours can never be dublicated in heart of Washington again- Drices and Data /m”':_fi % MIDDAUGH AND SHANNON Ixc, 1435 K St. Na8685s ‘ We challenge this as a com- parison in values for this lo- cality. Moore & Hill, Inc. 730 17th St. N.W. Natl. 1174 month’s total were $1,151,700, or 35 per cent of all construction. for residential | buildings; $803.000, or 25 per cent, for industrial plants; $577.500. or 18 per cent, for commercial buildings, and £357,600, or 11 per cent, for public works | and utilities. / | Total construction in Baltimore for the first nine months of this year| amounted to $74,776,800, as compared with $48,012,700 for the corresponding period in 1928, an increase of 56 per cent. & 1207 Hamilton ‘12,000 DETACHED—4 BEDROOMS Lot 160 Feet Deep . s €. 8. Adams, Riverdale, Utah, {armcr.! specializes in raising peaches 12 inches in diameter, 16 of which fill & crate. er——————————— CONSIDER THE MERITS OF THIS PROPOSITION Owner, now living out of town, has asked us to sell on easy terms to a relinble purchaser at a very reasonable price. A most attractive detached home in a home owners' community. On the first floor is a large living room with open fireplace, attractive dining room, sun parlor and a good sized kitehen with brand new stove. Ample pantry space. On second floor there are four delightful bed- rooms and attic over the entire house. The lot is beauti- fully landscaped, with a garage on a paved alley. Con- veniently situated between two car lines and close to graded and junior high school. OPEN FOR YOUR INSPECTION SUNDAY National Mortg. & Inv. Corp. ‘Natl. 5833 1004 Vt. Ave. o] e——=—a|———ja|———|q] TRACY PLACE —a new town house in exclusive Kalorama Heights. Ofpen Sunay Until Nine P.M. Eleven rooms, five baths, garage for two cars, 6212 GEORGIA ST., CHEVY CHASE, MD. $13.250 New home of English design, absolutely modern in detail and appointment, @ontains 6 perfectly planned rooms, garage, bronze screens, open freplace in lovely livin eet long, inlaid linoleum on kitchen floor, 6 closets on second floor, and model kitchen with built-in cabinets. The lot is of ample size, beautified with abundant shrubbery. g Open and lighted until 9:30 P.M. Detached brick house, on fully paved street, on deep lot running back to paved alley, with 2-car brick garage. The house has large kitchen, with dinette; dining room: living room, with open fireplace: inclosed sun porch; 5 bedrocms and 2 baths above. Absolutely modern. ad in beauti J° ful ROCKCREEK HILLS See for yourself the charm of the old trees, shrubbery and artificial pool. Open Sunday 3348 Tennyson Street CHEVY CHASE, D. C. Cirele on Western Ave t and House.) STONE & FAIRFAX : 1008 Conn. Ave. i "‘ MODEL | | I To reach—Drive out Mass. Ave. to 24th, turn right to Tracy Place. u&,.g“ nshu vy Otwners—Builders Drive out Connecticut Avenue to Bradley Lane, turn east ome long block to Georgia Street, then north one short block. - M. & R. B. WARREN (Turn right from Chery Chase e o Tennyson C o] ‘RE.LATIMER Y] Development WISCONSIN 2489 Day or Evening o ey o Nat. 2424