*Need help with appraisal appeal!* & Deep dive into my BRRRR!

[Ben Kirchner]

I am currently under the process of appealing the appraisal done for my property in South St. Louis.  The property is a quadplex with each unit being 1Bed/1Bath, 2970 Sq ft, on  Minnesota Ave (63118).  I was HOPING the the new appraised value would come in around $170k. My realtor did a great job of putting together a thorough report of nearby comps. However, by the time the appraisal was done, some of the comps could not be used, due to being over 12 months old. Instead of coming in at the $170k appraised value that I hoped for, it came in at $143k.  I am pasting what the appraiser has stated about the suggested comps.  

***If anyone familiar with this area has other comps they suggest I bring to the appraiser's attention, please let me know!**

3134 S Compton Ave is over 12 months old.

2834 Wyoming is a two-family and several days away from being 12 months old.

3304 Wyoming is a two-family.

3215 Wyoming has been added to the report.

2732 S Jefferson has been added to the report.

Also - The deep dive into my BRRRR and the current status

- Purchased for ~$120k (downpayment ~$30k)

- Rehabbed for ~$25k

(Initial costs  ~$55k)

So with the above mentioned original appraisal coming in at $143k, after refinance costs, I would only get to pull out about $6,500.  The new debt I would take on would be $100k, rather than the current $89k.  With the higher monthly payment and only pulling out $6500, my cash on cash % return would not be much different, while inheriting more debt.

HOWEVER, I appealed the appraisal.  They have now given me a new appraised value of $155k.  With this, I would be able to cash out $15k.  So now, the numbers are looking more like this:

Without refinance:

$9000 annual cash flow / $55,000 inivested = 16.36% cash on cash return

Current mortgage balance of ~$89,000

WITH refinance:

$8400 annual cash flow / $40,000 invested = 21% cash on cash return

New mortgage balance of ~ $108,500.

Taking on additional $19,500 of debt, but receiving a better cash on cash return, and annual cashflow not dropping significantly.

So certainly an improvement, and it was worth while appealing the appraisal.  However, ideally I am able to appeal further and provide more data that gets more of a bump up in appraised value.  Any comps you feel would be good to bring to the appraiser's attention, please post here.  Help very much appreciated.