The bigger concern would be your ability to refinance and make sure the property appraises for a value that allows you to refinance. that would be the risk, and if you cannot refinance, the balloon expires, the lender could foreclose on the property  

So new kid that bought his system was offered a two hundred bucks MF that was normal appraised for 150k only lol… and expecting that market would just grow , the system is working in 2009 though same thing to what Greg Hugher did in other bankruptcy filing lol

In the past, we have discounted appraisals for portfolio transactions.

They are still an oddball type of structure to some appraisers knock it down a peg when doing values.

Appraisals are based on the current condition.  

They will just use the market rents form the appraiser and you will need to have reserves 6-12 months.

Below are some general notes on DSCR loans:* usually used for single family or 2-8 multi family unit properties (fits your scenario)* must be for investment, non owner occupied (if looking for a product for alternative qualifying solutions for owner occupied there are other products)* can close in a personal name or LLC* usually 80% LTV for a purchase (20% down payment) & usually 75-80% LTV for cash out refis* prepayment penalties vary and are optional, but the higher the prepayment penalty, the lower the rate / options typical range from no prepay all the way up to 5 year prepay and structures vary for how those penalties work (3 year is my most popular by far)* appraisal most likely required and paid out of pocket during transaction* can be used for long term, mid term, or short term rental properties * generally 1%+ is the desired DSCR ratio but you get better rates if the ratio is higher (usually rate breaks kick in at 1.15%+ or 1.25%+) and you can still get the loan done if ratio is lower than 1% but the rate will reflect that (DM me if you wand help learning how to calculate the ratio)* the average time to close is 21-30 days* fees vary lender to lender and product to product, but $1595 underwriting plus title fees is pretty standard* 700+ credit is preferred to get max LTV, but plenty of options if credit falls below that* a typical loan minimum is $75k (have limited options for $50k+) and typical loan maximum is $3-4m (have limited options for $4m+)* 3 months reserves usually required, having 6+ months will usually result in better loan terms, 0 reserves can still get the job done if you go with a program that allows you to use the cash flow as reserves* 30 year fixed, IO, and ARMS available

For example in one of my properties I chose not to add the half-bath, but when I saw the appraisal report, I saw that the appraiser had a value of $9000 for the half bath and it would only have costed $4000 to add it.

Off-market property, which is likely the case if you were buying from a wholesaler, has no financing or appraisal contingencies most of the time.  

For properties being placed into service for the first time, 75% for the gross rent (based on the appraisal/1007) is used. 25% is assumed as expenses/vacancy.