How to negotiate with an appraiser

[Eric Palomino]

My husband and I are trying to accelerate our process in gaining multi-unit properties. We have two properties ( 1- 3 unit and 1-2 unit) in the Chicago area. Within the past year we gain another multi-unit property (2 unit) in the Northwest Suburbs of Chicago. This is our first property in the suburbs. We took out a HELOC to do the construction ( $150,000) and our thought was that this would be a great property that could put us into the BRRR method. However when we had it appraised, the appraisal value came in $ 120,000 under what we anticipated. The appraiser took comps from different suburbs ( about 10 miles away) due to only 1 sale comp in our area that is the most comparable. Additionally, the appraiser used what he " thought' we should get for rent, rather than the actual amount we are getting. the appraiser will not use the gross rent multiplier to appraise us, he will only use his sale comps to do the appraisal. Our lender has reached out and provided the discrepancies within his document as well as provided other comps that best support what we have done, and the appraiser will not budge.

How do we work through this situation to get a fair market value for the property? one option we have is to pay for another appraiser. If this is the best direction, how do I present the most important information to show the value of this property? also what pieces are the most important to show the appraiser? 

We want to make sure we keep this process moving as we need to pay back the HELOC asap. We are also hoping to get additional funds so we can use that on our next property.

Thank you in advance for all suggestions and processes that have worked for you. 

Thank you,

Eric and Ashley