Appraisal Issues with BRRRRR

[Carmen Pellegrino]

Ok feeling very frustrated. Need some advice. I am in the refinance phase of the strategy. We did the remodels got the properties rented did almost all of the work ourselves. The rent is good and return is not bad but our appraisals for refi came back way under what I was expecting. We had a realtor walk through and give us her estimate on selling price plus checked comps but basically the value went up the amount we put in. This means most of money will not be able to be pulled out. Any help or ideas around how to deal with this? Example one SFH purchased for $48000 remodel included new kitchen, new appliances, new flooring through most of the home(original hardwood in areas not replaced) new bathroom, rebuilt deck, completely rebuilt porch to include new roof. Put about $20k in and a ton of hours. Comps in area going for 80K-110K. Appraisal came back at $65k.....House is rented at $950 month tenant pays utilities.

[Kyle Dwyer]

Hi Carmen,

I can understand your frustration with the appraisals coming back lower than expected. It's disheartening when you've put in the time and effort to remodel the properties and anticipate a higher value. Here are a couple of suggestions that may help:

1. Hire a real estate agent: Consider having a real estate agent meet the appraiser during the appraisal process. This can help ensure that the appraiser has all the necessary information about the property and the recent improvements you've made. The agent can provide updated comps in the area and support your case for a higher appraisal value.

2. Rebuttal and re-evaluation: If you believe that the appraiser didn't consider the most relevant and recent comps, you can request a rebuttal and ask for a re-evaluation. Work closely with your agent to gather the necessary data, such as recent sales in the area and the specific improvements you've made, to support your case. Presenting a well-documented and comprehensive appeal may lead to a more favorable outcome.

Remember that appraisals are subjective, and there can be variations in the valuation process. It's important to advocate for the value you believe is justified based on the market and the work you've done. Keep exploring your options and consider consulting with your agent and potentially seeking additional professional opinions if needed.

Don't lose hope. Real estate investing often comes with challenges, and finding creative solutions is part of the process. Best of luck with your refinance, and I hope you're able to achieve a more favorable appraisal value.