Multi family financing/appraisal help!

[Bruce Scannell]

Hi everyone, Before the story I’ll cut to the chase (and you can read the story if you want)... Anyone have experience improving the MFR appraisal to maybe bump the value some? I have a small multi family (26 units) in southeast Michigan that we purchased from a burned out owner almost two years ago. We have raised the income by over 10% and slashed the operational expenses. The NOI looks strong, and if we use the same cap rate we purchased at it pencils out to a value of over 1.5M. I have been talking to a Fannie Mae lending partner and was told the area only supports 75%LTV and with the minimum loan amount, would need to appraise for over 1.33M to qualify. This seems like a slam dunk, but the highest recent per unit sales in the area are about $50k, which puts us at 1.3M and maybe not worth paying for appraisal...wha wha wha So...anyone have experience improving the MFR appraisal to maybe bump our value some? Thanks a bunch! Bruce

[Anthony Dooley]

@Bruce Scannell a broker isn't an appraiser. Poorly run properties near you can affect the cap rate used to calculate your value even though your NOI is higher. 1% difference in cap makes a lot of difference. Be willing to pay for the appraisal even if it comes up short, or just wait a bit longer.