Epic Associates 84-III, William C. Griffith, Jr. - Page 58




                                       - 143 -                                        
             value of the subject properties must be based upon the bulk              
             purchase price, the wholesale price, rather than the value of            
             each single unit because:                                                

                  The potential market risk [to each partnership] is                  
                  actually related to multiple units and not a                        
                  single unit as would be unrealistically reflected                   
                  by the EPIC/CAG approach of solely obtaining                        
                  individual unit appraisals.                                         

             In his testimony, Dr. Hewitt elaborated on that concept as               
             follows:                                                                 

                  What I was illustrating in the report is that                       
                  if you look at the way Epic appraised the                           
                  properties, they specifically, by the directive of                  
                  their captive appraisal group, dictated that the                    
                  appraisals be done on an individual basis, despite                  
                  the reality that their purchases were done in                       
                  bulk.                                                               
                       And what I am saying is is [sic] that                          
                  discount was represented because of the fact that                   
                  they, in fact, had a risk exposure relating to a                    
                  bulk purchase, so they paid a fair price for                        
                  buying 50, 60, 150 or 200.                                          
                       They may have–and I am trying to illustrate,                   
                  which is really the difficult concept in this                       
                  whole Epic matter-–is there is a significant                        
                  difference between the one-house-at-a-time                          
                  appraisal versus the risk, the portfolio risk                       
                  of having 50, having 100, having 250.                               

             On the basis of that statement, respondent asks the Court to             
             make the following finding of fact:                                      










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