Income approach verses Sale cost approach appraisals

[Michelle Bright]

Hey BP community!!! I am looking to refi a 4-plex that we purchased as our second investment last fall in Northwest Indiana. Feb will close the 6 months seasoning period. When we purchased to property the appraiser took the income cost approach and valued the property at $71k. We actually purchased it for $49k and put down 25% ($12500).

We have since moved to Chicago where we are currently renting but would like to purchase another house hack. Since cost of living is much higher here than in Indiana we will need a large down payment so my strategy was going to be to refi the 4-plex and pull our dp out plus some.

I have had trouble finding another lender even local banks that will consider the income cost appraisal approach. I do not understand why exactly. Does anyone have a better understanding on this than I? Currently I feel a little stuck in what I originally considered my strategy to to purchase my next property because of the push back we are getting from lenders pertaining to their appraisal approach. 

Thanks for any and all the help!!!

[Brie Schmidt]

Originally posted by @Michelle Bright:

Hey BP community!!! I am looking to refi a 4-plex that we purchased as our second investment last fall in Northwest Indiana. Feb will close the 6 months seasoning period. When we purchased to property the appraiser took the income cost approach and valued the property at $71k. We actually purchased it for $49k and put down 25% ($12500).

We have since moved to Chicago where we are currently renting but would like to purchase another house hack. Since cost of living is much higher here than in Indiana we will need a large down payment so my strategy was going to be to refi the 4-plex and pull our dp out plus some.

I have had trouble finding another lender even local banks that will consider the income cost appraisal approach. I do not understand why exactly. Does anyone have a better understanding on this than I? Currently I feel a little stuck in what I originally considered my strategy to to purchase my next property because of the push back we are getting from lenders pertaining to their appraisal approach. 

Thanks for any and all the help!!!

 was your first loan a 30 year fixed conventional loan?  I have never heard of a traditional loan that uses only the income approach. Appraisals will have the sales comparison, income, and cost to rebuild on it but the sales comparison is what they value residential property on.