HELP! The deal didn't appraise, now what??!

[Ryan Coffman]

Hey all,

I got this property under contract back in January, before SHTF. Needless to say everything is taking longer than expected with all that is going on in the world, but I recently ran into a bigger snafu. 

The deal:

-a 4 unit building, 4x 2/1, newer construction (2008)

-an adjoining SFR, 2/1, this is .4ac and holds the parking for all units and provides room for future expansion

-Purchase price of $275k, seller concession of $10k (after we received the inspections)

-GOI of $42k annually 

-Assuming an expense ratio of 40% this yields roughly a 13% COC and ~160/unit/mo.

So all is good, I got my rate locked when they were low and I thought this was a done deal! 

We received the appraisals on Friday. Basically the package is coming in at $220k. This is mainly due to the comps for the multi-family. They pulled the 3 most recently sold properties in the zip code. 1 was literally 100 years old, and the other 2 were purchased to tear down for future development space. Needless to say that all 3 were significantly less than the 12yr. old cash flowing building. 

Now, my bank is only willing to finance 80% of the appraised value (we all know this is typical, right). However, this puts me in the awkward position of having to put an ADDITIONAL ~$50k into the deal to get it done. Given the current economic state I want to keep this as my last and final option. 

I am working with this bank specifically as they have lent to me on other properties in the past and were the ONLY bank that I talked to willing to fund the deal with the properties being held in my LLC.

I'm open to any and all options to get this done!

Thanks for the help BP!