Appraisal Problems

[William Johnson]

I am attempting to buy bread and butter 2 bed/1 bath rentals in St. Louis, MO. I am in Sothern California (wore shorts and a golf shirt today). I am buying them from a rehabber who has bought them from the bank. He believes these proerties are worth $60,000 or so. I would buy them at a discount from that price.

When I have gone into the loan process, the appraisals have came in at $59,000 and $10,000 for the same property, $18,000 for another, and low $40,000 for a third.

I believe the seller is trustworthy. The reports show comps that are (to me) from non-rehabbed REOs not "retail" sales. My research shows that the $60,000 prices are possible.

Are other investors haveing similar issues?

What can I do to be certain of these values?

Can anyone in St. Louis give advise?

[Will Barnard]

Word of caution: Trustworthy or not, go see them with your own eyes, drive the subject property area and drive to each comp.
Trusting others could be a recipe for disaster. (I did say could, nothing is certain)

Comps can range all over the board in places like that. I would have to ask tyou why you believe 2/1's are the "bread and butter". What reserach did YOU do that told you that?

Be very careful in areas where comps are all over the board. That usually means a foreclosure stricken area where values are declining and the market is unstable. Any equity you believe you are getting at purchase could vanish in a heart beat, or perhaps, not even exist from the beginning.