Realistic Expectations of Contesting an Appraisal

[Chris T.]

So I just received an appraisal for a rental property that I did some rehab work on and am in the process of doing a cash out refi on to pull some of the equity out to pay back the rehab work and possibility have capital to further invest.  At least that was the hope until the appraisal came back at $147K.

To give a brief overview of the situation.  I bought the property in Dec. 2012 and it appraised for $138K .  This property is right in the heart of a popular area in Charlotte, NC.  Completely rehabbed homes are selling in the mid to upper 200's.  Homes that have had no rehab are selling mid 100's.  I expected our to fall somewhere in the middle.  My property had rotting exterior wood siding so we decided to renovate the exterior of the house with fiber cement board as well as install new front door and new wood on the front porch and rear stairs bringing the exterior in line with the other rehabbed properties.  This is in addition to the new 30 year roof we put on earlier in the year due to a leaky old 3 tab roof.  So the exterior of the house is brand new but we did not touch the interior as we are holding the property as a long term rental.  The inside is just average constructor/rental grade.  I had given the appraiser a detailed packet of information showing before photos, cost break down of the rehab done as well as receipts, and even a copy of the previous appraisal.

My realtor just told me that as a whole Charlotte has been showing a year over year increase of ~7.6% (per MLS) and again this property is in a popular part of town which was showing an increase closer to 11% for the past 12 months. His valuation, not including any improvements, hardly even falls in line with the average value increase. The comps that the appraiser pulled where almost all unrehabbed properties which he adjusted upward (or hardly adjusted). The one property that he did use that was rehabbed and then adjusted downward to reflect condition showed our property to be worth ~$220K. There are many other rehabbed properties in the area that I am hoping to use as comps in the rebuttal that he did not consider.

Long story short... how realistic is it for a lender to adjust an appraisal after receiving a rebuttal?  With this large of a discrepancy should I be expecting another appraisal?  Anyone else have success in a similar situation?