Help! Appraisal came in MUCH lower than ARV estimate...

[Alyssa Balam]

We're ran into our first BIG hiccup in real estate....

We purchased a large SFH in the area for $185K and took a loan out for $235K (to use as construction loan for the reno) with seemingly lots of update potential to turn into a triplex. The renovation is complete and it's 3 units now, but due to it being so close to the holidays, we haven't found any tenants yet.

Used hard money to purchase the property and now it's *time's up* and we need to refinance! Unfortunately, the appraisal just came back for $235K when we had estimated along with our real estate agent an ARV closer to $340K based on comps. This is a crushing difference.

Does anyone with more experience have any advice on how to best mitigate a HUGE loss here? We're already asking for another appraisal, but do not have high hopes. The refinance is now set to require $80K cash to close. 

Thanks in advance BP community!!