Appraisal outcomes are messing up the BRRRR strategy, Why?!

[Cory Howes]

Hello BiggerPockets community, 

I'm hoping somebody may be able to shine some light as to why my appraisals are coming in much lower than current market values. I have been buying fixer uppers, both single family and multi family, rehabbing them, and they are not appraising for even close to what I know I could get on the open market. 

I'm trying to pull more equity out to continue expanding our portfolio, but the appraisals are coming in ~15 to 20% lower than expected. Is there any way around this? I've tried walking the property with one appraiser to explain all of the work we did to the property, but they honestly didn't seem to care. One time, I had an appraiser show up in a yellow BMW convertible, he spent under 5 minutes walking through a duplex, left, and charged me $750 for an appraisal that I felt was not accurate as to what it would sell for on the MLS.

From the outside, It seems that appraisers look at what I paid for the property, then look for comparable houses that sold for around that price, and then come up with a price that has appreciated minimally compared to the amount of work we have put into the homes. 

Am I just having bad luck with appraisers, or is there a way around my conundrum. Without accurate appraisals, the BRRR method is no good!

[Eliott Elias]

Unpopular opinion: some appraisers are local and dislike investors coming in to their neighborhood and "taking advantage" of homebuyers by forcing appreciation. This is especially true if the appraiser finds out what you paid for it.