How To Value Heavily Modded PC's?

[Daharen]

So I'm filing for bankruptcy, and part of this is that while the lawyer assures me he has never had a PC seized, I still have  to try and  come up with an appropriate evaluation for what it's worth. This is a difficult proposition since there really isn't much on the PC I haven't done some fairly extreme modifications to. What do I mean? 

Well the CPU is a delidded Silicon Lottery CPU, that I delidded again against silicon lotteries warranty clause, lapped, and applied liquid metal to with direct die cooling. The entire waterloop is expensive, but it's a custom soft tubing  water loop, that realistically couldn't be transfered or used in another system without damaging the components. The GPU was an EVGA 2080 ti Ultra FTW, but I took off it's cooler, and put on my own HydroCopper cooler, and while I was at it, I removed all of the thermal pads from it, and put on Fujipoly 17 w/mk pads, and then again used liquid metal for the GPU die, after protecting everything with conformal coating. I have a 905p in the system, as well as Samsung 970 Pro, but both have been stripped, with a liquid cooling block and thermal pad change on the 905p and the pro stickers torn off, and thermal grizzly kryonaut applied to the Samsung, and it installed with a larger heat sink with an in case point fan aimed at it. The ram has had it's heat sink replaced as well. 

Finally obviously everything in this system has been heavily overclocked and ran at those overclocks with higher voltage than usually for quite some time (Except the solid state drives), including the mobo itself so technically it's warranty is voided as well. Custom bios were flashed onto the GPU. 

Now... OBVIOUSLY this was an extremely expensive rig to put together, and if I were to tally the price for all the components, it would be outrageous. This is my hobby, I do it for fun, not for practicality (And until recent unexpected events happened I could afford to do so). 

However, usually when you void things warranties, do high risk high workload processes to them, and make heavy modifications, in any other field, you decrease the value because of the associated risks, you don't increase the value by the cost of the new components. In addition, in many cases some fraction of the value is literally removed (IE I no longer have the original heat sink and fans for the GPU), and while arguably a more valuable part was added, it was added in a way that makes warranty impossible to honor, and since it wasn't done by the manufacturer, I'm not sure if it's considered an added value... 

I'm trying to figure out how and the hell I should value this PC, since frankly, the market simply doesn't exist as far as I can see for parts as modified as my own. I'm not sure if that's because people just don't sell parts like this, or if it's because they literally can't be sold, or if it's because when they hit the used market they sell like hotcakes, so any insight would be appreciated. 

(I went to Law School for a year, and have looked up the legal question regarding this, and the law has no established protocol for these sorts of evaluations, so don't even worry about the legal aspect)




Add On Note: The law does say something about evaluating cost in this case, I was speaking too broadly.

Sorry the way I expressed this I can see how you would think that. Legally in 'most' cases value determination is used  for liability, so most times courtrooms don't care about devaluation (IE when you're suing someone for not doing a job correctly). 

Bankruptcy is different. The purpose of the valuation is not to determine what the principal spent on the items to determine liability, the purpose is so that the Trustee knows what he can liquidate to provide creditors with some form of compensation before all the debts are dismissed.

Consequently, what really does matter is how much could the Trustee sell this thing for. 

Edited October 2, 2019 by Daharen
Important Additional Note

[Dougarooo]

So don't take my word for it. I'm not a lawyer.

 

Since this is a bankruptcy it's valued different. You as a consumer might value it higher or lower whatever. What is the products in it actually worth. Sure you say it would be expensive but you also say it's heavily modded so it's just going to be that way. How much, if someone else went and bought all these products, would they end up spending?

 

Could you add more on top of that for labor? Maybe? I'm not sure on that line.

[TheVillageIdiot]

Consumer electronics have almost no value unless it is something highly coveted / unique. 25 percent of retail at best and almost nothing to normies.

[Daharen]

3 minutes ago, Dougarooo said:

So don't take my word for it. I'm not a lawyer.

 

Since this is a bankruptcy it's valued different. You as a consumer might value it higher or lower whatever. What is the products in it actually worth. Sure you say it would be expensive but you also say it's heavily modded so it's just going to be that way. How much, if someone else went and bought all these products, would they end up spending?

 

Could you add more on top of that for labor? Maybe? I'm not sure on that line.

Sorry the way I expressed this I can see how you would think that. Legally in 'most' cases value determination is used  for liability, so most times courtrooms don't care about devaluation (IE when you're suing someone for not doing a job correctly). 

Bankruptcy is different. The purpose of the valuation is not to determine what the principal spent on the items to determine liability, the purpose is so that the Trustee knows what he can liquidate to provide creditors with some form of compensation before all the debts are dismissed.

Consequently, what really does matter is how much could the Trustee sell this thing for. 

[Origami Cactus]

3 minutes ago, TheVillageIdiot said:

Consumer electronics have almost no value unless it is something highly coveted / unique. 25 percent of retail at best and almost nothing to normies.

You truly have an appropriate username, that is the second nonsense answer i have seen today by you.

 

2080ti isn't gonna loose 75% of it's value just because it is used, it is still at minimum worth 75% of it's retail price.

 

 

While custom watercooling builds generally are valued terribly, because most people who want those build it themselves, but you should be able to get atleast 50% of it's initial price.

 

[Daharen]

3 minutes ago, TheVillageIdiot said:

Consumer electronics have almost no value unless it is something highly coveted / unique. 25 percent of retail at best and almost nothing to normies.

I was kind of thinking the same thing... But I need to be positive, it's important to know what a trustee could sell my computer worth if he were going to try, because thats the value he'd be interested in (IE If he decides to liquidate the computer to cover debts, he will want to know what it will cover, and if its worth the cost of managing the sale). 

[Daharen]

1 minute ago, Origami Cactus said:

You truly have an appropriate username, that is the second nonsense answer i have seen today by you.

 

2080ti isn't gonna loose 75% of it's value just because it is used, it is still at minimum worth 75% of it's retail price.

 

 

While custom watercooling builds generally are valued terribly, because most people who want those build it themselves, but you should be able to get atleast 50% of it's initial price.

 

That does make sense to me too...  So 50% of the price of all the components put into  it though, or should I expect 50% of the price of a comparably specced computer, regardless of the extreme nature of the modifications?

 

[TheVillageIdiot]

1 minute ago, Daharen said:

I was kind of thinking the same thing... But I need to be positive, it's important to know what a trustee could sell my computer worth if he were going to try, because thats the value he'd be interested in (IE If he decides to liquidate the computer to cover debts, he will want to know what it will cover, and if its worth the cost of managing the sale). 

Does not mean you can not get a greater return out of it... It will take more work . Parting it out to people who understand its value and performance.

[Origami Cactus]

Just now, Daharen said:

should I expect 50% of the price of a comparably specced computer, regardless of the extreme nature of the modifications?

 

I would go with that, because most people don't care about the modifications etc, they only care about the specs.

But 50% is a bit low, 60% is a more appropriate estimate.

[Daharen]

1 minute ago, TheVillageIdiot said:

Does not mean you can not get a greater return out of it... It will take more work . Parting it out to people who understand its value and performance.

I won't be the one selling the parts, it will be a trustee who  is more likely to be an accountant or lawyer, with very little electronics knowledge, and most likely will sell it all together if he does,  as disassembly would be an added cost. 

Again the valuation is what will determine if he/she bothers or not.

[AngryBeaver]

I doubt they would take a PC. There is too much liability in taking something know to have PII on it and also something that might contain information that is needed. For example you keep tax documents on your machine or receipts.

 

I would tell them the machine is worth 1500 and that you cannot stand to lose the information on it.

[TheVillageIdiot]

Not a good thing. Maybe you will get lucky.

[Daharen]

2 minutes ago, Origami Cactus said:

I would go with that, because most people don't care about the modifications etc, they only care about the specs.

But 50% is a bit low, 60% is a more appropriate estimate.

That makes sense, and I'll  just look up one of the all in one watercooling kits and apply 60% to that as well to get a rough estimate... I also have noctua fans so I'll account for those as a replacement. 

Will still come out quite valuable, but hopefully below the margin they'll aim for liquidating. 

[Daharen]

1 minute ago, AngryBeaver said:

I doubt they would take a PC. There is too much liability in taking something know to have PII on it and also something that might contain information that is needed. For example you keep tax documents on your machine or receipts.

 

I would tell them the machine is worth 1500 and that you cannot stand to lose the information on it.

You're somewhat right, I can actually exclude the value of the hard drives from the final price, since I can exempt them from being taken because of privacy reasons, and because the government and courts won't pay for a secure data wipe in order to sell it, and the expertise to dis-assemble the rig with the liability involved in possibly damaging it, and having to compensate me for the cost added. 

However, they can instruct me to remove the drives myself, and sell the remainder of the rig. So it's just a value dependant situation unfortunately... I THINK I am probably safe. But most people don't have electronics that hit the price points I'm playing with, so it's a high risk assumption depending on the trustee, as it could potentially pay off at least one of my debts if skillfully liquidated. 

[TheVillageIdiot]

 Rude little all knowing cactus :)~
 

[aisle9]

IANAL:

 

I doubt a PC would be seized for exactly the reason you stated above: reselling it would be more trouble than it's worth. Creditors/trustees will want the stuff with relatively universal value.

 

As far as valuation, you're right. You've voided basically every warranty. You've damaged the CPU to the point where its value is tremendously depleted. Your GPU has no warranty and has been altered in a way that could have caused damage. The easiest way to do this would be to go back to the value of the parts when you originally purchased the item, then factor in the damage caused by your modifications. Remember that these components have essentially zero value outside of this system at this point because of the extensive modifications you've made to them, so their individual value is going to be largely based on the system as a whole.

 

Now, go back to the MACRS table in the five-year, 200% class (table A-1), which is what you'd use if you were claiming a tax deduction on your PC, so that seems fair to use here. The MACRS depreciation table is as follows:

• Year 1 (year of purchase): 20% of original purchase value lost
• Year 2: 32% of Y1 value lost
• Year 3: 19.20% of Y2 value lost

Essentially, if you're more than one year but less than two years removed on a PC purchase, roughly 50% of its value is gone. Yes, I used to deduct PCs on income tax. Yes, it sucks to calculate, but I never got into trouble nor was I audited using this table. Don't list the components, just list the overall value based upon original item price minus the value lost by modifications, then depreciate based upon the table above. So, example, if your PC was worth $1.5K when bought and you drop that to $1K based upon modifications made, and you bought that PC more than two years ago but less than three:

• Original PC value: $1,000
• Year 1 PC value: $800
• Year 2 PC value and your current value based upon MACRS: $544

Again, IANAMFL, but when I was calculating PC value for my own tax returns and for my old company's tax returns, that MACRS table is how I did it.

[Daharen]

4 minutes ago, aisle9 said:

Snip

Hmm, interesting, I will add that. Is there a way to lookup the day the OS was installed on a computer to remember how old it is? I had the parts sitting around for an awfully long time before assembling it, so I could use the date of the first part order, but I feel I am stretching it a lot of it I do that since the first part was a pre-ordered 2080ti that took ages to get to me. 

[Daharen]

8 minutes ago, aisle9 said:

Snip

Figured it out myself with a quick google search... So yeah I think if I did it the way you're stating then it would be no loss. I've never refreshed the OS, and the original install date is reading 3/17/2019, which means that's pretty much how old the computer is. Given that I don't even reach one year of depreciation. 

I will have to make a best guess based on 'damage' and 'warranty violation' since frankly the depreciation pretty much should exclusively stem from those, and very very little from age or use. 

[aisle9]

22 minutes ago, Daharen said:

Figured it out myself with a quick google search... So yeah I think if I did it the way you're stating then it would be no loss. I've never refreshed the OS, and the original install date is reading 3/17/2019, which means that's pretty much how old the computer is. Given that I don't even reach one year of depreciation. 

I will have to make a best guess based on 'damage' and 'warranty violation' since frankly the depreciation pretty much should exclusively stem from those, and very very little from age or use. 

It's 20% depreciation. Think new car. A new car is worth 30% less the second you drive it off the lot, because now it's used. Same thinking applies to a PC. Worth 20% less the day you take it out of the store because it's used.

[Kisai]

3 hours ago, Daharen said:

Now... OBVIOUSLY this was an extremely expensive rig to put together, and if I were to tally the price for all the components, it would be outrageous. This is my hobby, I do it for fun, not for practicality (And until recent unexpected events happened I could afford to do so). 

 

Well I don't know how "bankruptcy" affects the value of a system, but basically you have two values:

 

a) Value of the purchase price (or current value those same parts from eBay/AliExpress)

b) added value of the modifications.

 

In terms of "how much would it go for at a bankruptcy auction", probably pennies. Corporations often throw away perfectly good equipment, so a custom rig will probably only be valued at the scrap value of the individual parts as a bundle. So if it's not brand new, and not a Mac Pro, it's probably going to have a value of what it would cost to assemble the same equipment from parts from eBay. Any value added from the modifications being entirely ignored.

 

Even normally, one is hard pressed to re-sell a computer system, mods or not, because there is usually too much of a performance jump between a new system and a three year old system, so there is no incentive to buy an older system unless the older system has parts in it that are hard to obtain. So I'm assuming this system is more of a HEDT or Workstation rather than just a tricked out desktop. You can get more money for a HEDT/Workstation because they are very expensive to build in the first place, and people will see the value in it. 

 

Unless a Celebrity has sneezed on it, it's probably only going to be worth what you could sell it for on eBay.

 

Personally, I'd probably value it based on how much it would cost to assemble the same thing from Amazon.com, then remove the hard drives (for PII reasons) , and subtract how much warranty has been removed by not being new, even if that warranty is void. So if it's 6 months old, that's probably half the warranty period on parts like the motherboard and GPU. If a part has no warranty, then it's only as valuable as one would be willing to pay for it (eg on eBay.) 

[rEkmAInc1csBnlM6C85H]

As other have mentioned, using the standard formulas for depreciation is your best bet.

 

Here is a simple liner one I recall from my nightmares of Business 101.

(Purchase Price - Salvage Cost) / Projected Life Of Asset

[Mooshi]

This will probably treated how cars are valued where overly modified doesn't hold the same value as stock if the car itself is worth a lot. Someone not into computers would look at that, shrug and will more than likely "this looks about 2 - 3 grand".