Appraisers are in control of a thriving or stagnant RE market

[Ben Gordon]

*Disclaimer* Not all appraisers apply. This forum is about the experience I am having in my market

Where am I looking: MLS

Method of investing in this discussion: BRRRR

I want to get your feedback on how to get more creative or should I just seek greener pastures.

Yesterday I spoke with 2 different appraisers about "what is the best bang for my buck" when putting money into lightly distressed property. By the way, I highly recommend doing this! Talking to them was very insightful to what they look for, what they like, what they don't, their opinion of the market, their opinion of SFR vs MF investments, and their feeling of the value (SFR, MF).

Here is why I have decided to ask these questions. There are several duplexes in my area. Most of them are in ~$40-$50k listed price. Most have long term tenants and the current rent is very good.

Here is my pickle...After talking to the appraisers, their opinion is not high of the MF properties. With that being said, their opinion is that if they appraise one of these properties for $60k you're on the high side. They do not feel the market is strong for MF, yet in the same breath they said that when they do rent comps, they do very well. 

Most of these properties need ~$10k per side.

So, here is my question. How can you BRRRR better under these parameters:

Purchase: $40k (add closing cost)

Rehab: $20k (10 per side)

Appraisal: $60k is the high side

Ref 80% LTV: $48k

Total OOP:   $12k + Closing (still cash flows well)

The point to my Subject line is this; If appraisals were higher, investors could "afford" to improve the conditions of these homes thus creating curb appeal, put contractors to work, etc... Since these appraisals are so low, these properties sit on the market, distressed, and only attractive to a slum lord just seeking cash flow.

How do you handle low appraisals with cash flowing properties, and make a more efficient BRRRR (less OOP)?