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Updated almost 5 years ago on . Most recent reply

First deal under contract! But appraisal came in low...
Hey guys! I have property Under contract for $215,000. It’s a 5 bed 3 bath 2,050 sq ft home built in 1995. It’s a stand-alone home part of a gated community built in the 90’s. It’s on the same road as the high school and just 1 block from main-street.
Originally I thought it would appraise for 240-250k, but the appraisal just came back at $215,000. The appraiser used only comps within this community mixed with apartments, condos and townhomes that share a pool, tennis courts, all maintenance exterior and RV parking. I should have foreseen this with the fact that I won’t own the land.
I have about $13,000 in credits with CC and my real estate commission. My all in monthly payments, including tax, insurance, HOA fees in about $1,100. Rent comps run $1,600-$1,900 (updated at $1,900). The cash flow will be good. But my equity won't be where I thought. Should I still buy it?
I am in the real estate for the long run. Buy and hold.
I make about 84k as a career firefighter. And just got my real estate license and make about 5-7k a month for the past 6 months.
I am using a HELOC on my primary residence for the down payment. The HELOC payment is $108.
what do you guys think?
Most Popular Reply
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@Kole Halladay, Appraisers like to come in at value. It's a big game. The odds of it truly being worth exactly what you agreed to pay are very slim, but most of my deals are like that. They appraise magically at contract price or just slightly above. They really don't have anything to gain by saying it's worth more. Their job is to prove to the lender that it's worth the selling price, not more. They have no incentive to appraise it higher.