Ellwood Technique

The estimation of the present value of real property for the purpose of determining loan amortization, time value of money, appreciation, and depreciation.  Developed by L.W. Ellwood.  Using the technique, the appraiser determines and discounts to a present value the annual cash flow to the equity owner and the expected resale proceeds.  Those are added together to derive the equity value, and then added to the mortgage balance to offer a property value estimate.


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