Low appraisal and additional out of pocket

[Tony Mai]

I am in the middle of this deal in Houston TX and I'm purchasing the property through a turnkey provider. The agreed purchase price was 300k. However the property was appraised for 260k which I believe is the true value of the home currently. The seller wants 282k, should I pay more out of pocket? And if yes, is there a way to do some creative finance for the difference? The current rent rates for the area for a similar property is 1800, however the main reason why I am purchasing is there is a corporation lease on the home for 2700 for an additional 4 yrs (lease includes maintenance and property management already paid) Should I proceed with the deal and pay more?

[Steve Milford]

Only you can make that decision to continue the deal. 

Does your deal have a contingency that if the appraisal is low that you can get out of the deal unscathed? Every purchase contract I put together has that. Without that contingency, I have heard horror stories where people lose their earnest money (I saw one person lose $20k) because they couldn't execute the contract as agreed when issues like this come up. Remember that it doesn't really matter what you believe it is worth, as you agreed on a different purchase price - that's why you need that contingency. And it doesn't matter what the rent is for if you can't purchase the property. The only creative financing I know of is when I ask a relative for some cash. Otherwise, everyone else wants a contract and that's not "creative" in my book.