Low Appraisal ARV/ Hard Neighborhood to Comp?

[Martin Lindsay]

Alright gang I need some insight here. I’m under contract to buy a great house that’s in a very desirable neighborhood, part of the Historic District in Gastonia, NC. Not even a mile from downtown where they just broke ground on a big development for a baseball stadium and multi use complex, and a renovated mill turned high end apartments.

I’m buying it from a wholesaler, whose contract price is 130k. I’m buying it for 145k, gonna put in 20k in updates and be all in for 165k. Tax value alone is 171k. The house is in amazing shape as is. Easily livable. All the work I’m doing is just cosmetic updates. New kitchen appliances, counters, cabinets, and painting inside and out etc.

Appraisal came in with the "as is" value at 130k, and the ARV at 195k.

Now I understand that the appraisers really just look at the numbers and accurate comps, and that’s how they come up with their value. And she looked at all the right comps. The trouble is that this neighborhood is so established that people don’t move in and out very often. The average resident in the neighborhood has lived there for 15+ years. The house next door is nearly the same size and sold for 205k in 2017. That was 2 years ago and doesn’t take into account the value that the new development down the road brings.

I had my ARV at 220k, taking into account the neighborhood, market trends, comps etc. but now I'm a little nervous to try and flip it and put that price tag on it, only to have a buyer get it appraised and they come up with 195k too.

Am I hanging on by a thread here? Living on a prayer? Shooting in the dark? Any insight is helpful!! Thanks!