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First, thanks for all the comments and ideas.

Relative to "Standard FNMA form 1004 Appraisal. Going the recently sold comparable route," I assume that they would then be valued as residential (owner-occupied) without regard to the NOI. If so, that should work in her favor as to possible refinancing. The assessed value of all the properties is somewhat higher than $4mm. I'm told that Hawaiian assessed values are fairly close to perceived market value.

On the other hand, if you value the properties based on an income approach, you only get a little over $2mm - even if you increase the VERY low rents to market levels. Of course, I've already advised her that she make such increases, albeit at a gradual pace. Unfortunately, she is currently renting some of the units to family and friends. She needs to decide whether she's going to be a "sound real estate investor" or a not-for-profit, charitable subsidized housing source for family and friends!

I've already decided (after consulting with a tax expert) that the like-kind exchange doesn't meet her needs. So, I'm waiting on a lending officer from one of the Hawaiian banks to get back to me with answers to a number of the questions I've posed on this board.

As to your suggestion about management, my niece has been the "manager" of this real estate for many years - not her husband. That said, she hasn't been aggressive enough on setting rents.

Again, thanks for the tips.

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