need help on an appraisal

[Wimblees@aol.com]

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In a message dated 10/9/02 10:14:50 AM Central Daylight Time, Kdivad@aol.com 
writes:


> Wim, you are correct that the cost of a rebuildable Steinway is at the upper 
> limit for speculation.  I paid in the $10,000 range not $12,000 and since I 
> rebuild the pianos myself  the costs run me around $8,000, that puts the 
> total at around $18,000.  Though Steinway "M"s can be a little slow to sell 
> they will still bring $25,000 as quickly as a brand new $30,000 "M."  

David

This gets back to a discussion this list had several years ago. You buy a 
piano for $10,000, and put $8000 worth of supplies into it, and sell it for 
$25,000. That gives you $7000 "profit." Ask yourself this question. If you 
were to rebuild an M for a private customer, would you do it for $15,000?  If 
you are willing to do that, then you are coming out the same, but not making 
a profit. 

The money you have tied up in that M did not make you any money. You would 
have been better off putting that money into a savings account, and letting 
it earn 2.5% interest. 

But if you charge a customer more than $15,000 to rebuild the piano, you are 
loosing money. Yes, you're talking about your labor, but instead of working 
on your own piano, you could be working for a customer and making this money. 
If you had nothing else to do, that would be fine. But if you are busy, it 
becomes a drain. 

> 
> What Gordon is talking about is a different thing entirely, his customer 
> needs to know how much insurance he needs in case the piano is damaged and 
> needs to be replaced.  Most customers do not have the ability to find and 
> purchase a piano at wholesale prices, especially in fairly good condition.  
> If I purchase a Steinway for $10,000 you can be sure it will need complete 
> restoration (unless I get real lucky).  It sounds like this customers piano 
> is in fair, playable condition, how could he possibly find a replacement 
> piano the same condition for $7,500?
> I will purchase every "M" I can find for $7,500, but the problem is where 
> do you find them?  
> 
> David Koelzer
> 

The insurance company wants to know the value of the piano as it sits. Not 
what it cost to replace. And that value is what the piano will bring in a 
quick sale. Not what it will sell for in a store, or if the customer has a 
year to sell it.  That is why you need replacement value insurance. 

I don't know, I've been out of the wholesale purchasing business for over a 
year. Are older M's bringing $10 - 12,000 these days? That sounds awfully 
high to me. 

Wim 

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