BRRR on 4 unit property

[Kyle McCorkel]

Working on a potential deal:

4 units, each is basically identical.

2 beds, 1.5 baths, ~1000 sq. ft.

The property needs no mechanical or capital expenditures that I know of. Separate utilities.

Rent = 550/month X 4 = $2200/month

Seller is asking for $224K, my initial offer was $180K, hoping to get for under $200K. At $200K, when factoring in all operating expenses (vacancy, management, insurance, taxes, maintenance, cap ex) and debt service, COC will be 10%.

My strategy is to acquire the property, get the initial COC of 10%, which isn't bad, but then rehab all the units as they turn over. They are in bad need of cosmetic upgrades and can sustain a rent increase (avg. rent comps for rehabbed unit are $800). Estimated rehab is about $30K.

My question is this: how do I estimate what ARV will be (sales comps are not good in this area), and more importantly, how can I expect an appraiser to estimate ARV? Will they even take into account the additional income generated by increased rent (and calculate value using cap rate)?

I'd like to have the option of doing a refinance after rehab, but I'd like to have a better idea of what to expect from the bank/appraiser.