Multifamily appraisal. Appraiser didnt use rents

[Matthew Wright]

I have an 8 unit UC, closing in a couple weeks. Just had it appraised and the appraiser had no rental data or cap rate in the report. Im concerned mostly, because i plan to refi in 6 months, after rents are raised and expenses are lowered.

Between cutting expenses and raising rents im looking $250 increase per unit. So theres alot of upside and equity to be had, but if appraisers are just going by comps and physical condition (just as they would have with a 1-4 unit) then i wont increase value by cash flow improvements, ill only gain equity by replacing the windows and new paint, which i plan to do. Im heavily relying on value add thru cash flow increase. Concerned they wont factor in what ive done with the income in 6 months when i go to refi. If rents arent considered on next apprsisal, it will completely disrupt my plan, which is cash out and buy bigger building....

Anyone know why appraisor didnt ask for rent roll for this 8 unit? I thought rental income played crucial role in evaluation. 

[Chase McArthur]

@Matthew Wright

It all depends on which method he used to appraise the property. I find it a bit unusual that he didnt consider income capitialization in his approach. Are you sure he was a commercial appraiser? Not sure how you purchased it, but when you refi the income will be considered. It should've been considered in the purchase if you took out any debt. Income on a commercial property plays a very crucial role in valuation. Were his numbers in line with your purchase price? Is the property occupied? Do you know the purchase cap rate? Are there any comps in the area? Post some more detail about the property, please.