Appraisal came back $35,000 lower than sales price (Turnkey)

[Daniel Mills]

OK. So here is the situation. I was in the process of purchasing a rental property through a Turnkey company that was asking $261,000  that just appraised at $226,000. Of course, I am not paying the original amount and I have sent an email asking if they will lower the sales price to the appraisal amount. I haven't heard back yet, but I am guessing they will dispute the amount and say that they will pay for a second appraisal. This is a bit worrying because I know that some appraisers who get a lot of business from the company might try to fudge a bit to get the sales price they want, right. So, I am planning on asking if I can choose the appraiser. I am just wondering if there is anything else I should consider to make sure that I don't get taken here. Any advice would be greatly appreciated.

Thanks,

Daniel

[Daniel Mills]

Update: The company asked the appraiser to reconsider and provided him additional comps. He refused. They then offered to meet me halfway between the appraisal price and their price. I refused saying that as an out-of-state/country investor who is not an expert in their market, I must rely on the appraiser's assessment for price. They were understanding and are returning my earnest money right away.

As I stated in previous posts, this was a bit of a risky play for me where I was going to buy a break even property cash flow wise that had good appreciation potential. The other 8 properties I own are all about cash-flow and as a good W-2 income earner I thought I could risk this as part of my portfolio, but I think from now on I will stick to the fundamentals - single-family homes in B areas that cash flow well. On to the next deal!

Thanks for the advice guys.