All Forum Posts by: Caitlin Worrell

@Anna Watkins I feel your pain regarding a disappointing refinance! I did have a tough time pulling appropriate comps, most were stale and distant. Partially, I think this is due to the neighborhood which comprises mostly SFRs.

Based on my research, we are around average, maybe even a bit below average, in terms of rent. When I look at two bedrooms in my zip code on rentometer.com, the average 2-bedroom is $1,895 with a range of $1,310-2,480. In that case, $1,600 seems like is should be supported by the evidence base.

@Russell Brazil Thanks. It is very curious that the appraisal always seems to come back at exactly the contract price. I am trying to better understand the methodology and analytics used by the appraisers to avoid unfavorable outcomes. I assumed that the market value would be at least the amount we are actively commanding for rent. It seems like a basic economic concept, the value of something is what people are willing to pay for it.

@Mark VejnarThanks for outlining those three appraisal methods! I will look into them more. I am not so much enraged as curious to understand the process. I would like to avoid paying for an appraisal only to miss the mark. Rental values in Atlanta are quite healthy at the moment, so we cannot complain about that!

@Jeremy Pace Thanks for your ideas! I think one of the main issues is the limited amount of multifamily inventory in our neighborhood. The comps are both a little far and a bit stale. I am trying to understand if we have any options (e.g. high ROI improvements, diligent documentation/justification, timing the appraisal based on data) to achieve a favorable outcome.

Subject: $550,000, 2,518 sqft, good cond (interior street)

Comp 1: $547,000, 2,346 sqft, good cond, 5 months old, 0.79 miles (busy street)

Comp 2: $470,000, 2,376 sqft, ave cond, 5 months old, 0.63 miles (busy street)

Comp 3: $675,000, 3,579 sqft, good cond, 7 months old, 2.0 miles

Can someone help me understand how appraisers generate the values during the appraisal process? I am reading our appraisal report and trying to make sense of it.

We own a duplex and occupy one of the units. Back in November we had an appraisal as part of an attempted refinance. We estimated that the value of our unit (2 beds/2 baths) is about $2,200, and the opinion of market rent was $1,995. The second unit (2 bed/1 bath) is currently rented at $1,600 a month, but on the appraisal report, the opinion of market rent was $1,500. The appraiser was aware that the unit was rented at that price.

I can understand that the figure would be different for the unit that isn’t actively rented, but I don’t understand how the opinion of market rent would be less than actual rent. Any ideas??

Thanks, Omar! I appreciate the well wishes. A similarly-sized single family home is going for $675,000, so we are pleased to be in the neighborhood at a discount and rent cover a good portion of the mortgage. When we decide to move, we project that we can cover all expenses (PITI, maintenance, CapEx, and vacancy) with rental income with a bit of cashflow. For now, we are hoping we have the option to refinance and make smart decisions about any upgrades we make.

REI newbie here! We recently bought our first house, a run down duplex in a higher-end in-town neighborhood in Atlanta. We are house hacking. We eventually want to rent out both units, so our strategy is to improve our unit in a way that both improves our quality of life but also improves rental income potential.

The first 6 months were spent catching up on deferred maintenance on the interior/exterior. The house needed foundation work, which we were able to do with seller contributions. On the rental side we installed a new HVAC system, did a minor kitchen reno, made some bathroom updates, and cleaned ... so much cleaning! On our side, we took out the carpet and refinished the lovely hardwoods we found underneath, upgraded the stove, painting, and upgrading fixtures.

We purchased the house back in May at $515k. Since we weren't able to put 20% down, we are paying 4.875%. We are hoping refinance in the coming year, before interest rates increase. The house appraised for $555k back in December, but we need to appreciate by another $15k to quality for for refinancing (80%LTV).

The challenge we are finding is that there isn't a lot of multifamily inventory in our neighborhood. The comps tend are they are in rough shape and were sold longer ago (6-9 months). Is there anything we can do to improve our appraised value? We are recovering from depleted savings and saving for a wedding, so we are looking for lower cost, high ROI modifications. Any ideas would be appreciated! Thanks!