Property appraised for 1.6M.

Like you said, it was a strong seller's market then with steep appreciation, multiple offers, way over-asking price offers, escalating clauses, appraisal gap coverage, buyers waiving all contingencies, etc.

SFR houses will only appraise based on comps.So unless someone was paying cash you can't get more than they appraise for.The camp ground is a different story.

Weird layout houses in a questionable neighborhood (making an assumption there) don't sell for appraised value.

Is the 11% equity from the appraisal over the sale price?

The location all in,cost him X; he got an appraisal for the bank from CBRE national firmof XX and now the firm who called him mentioned paying XXX.

It is more expensive but may not require an appraisal and can close in a couple of weeks. if I can wait then I use the most competitive rehab. lender after obtaining multiple quotes. 

There are quite a number of things that can make utilizing an FHA loan more difficult such as more barriers during appraisal, appearance of low qualification/little cash, typically longer closing period, likely higher interest rate, and PMI cannot be dropped without a refinance if 3.5% down.That said, just chain 5% down conventional loans, and make sure your duplexes pay for themselves.  

Search the BP for ADU appraisals to encounter numerous examples.

Bank financing is very tough for anyone starting out so HML is generally ( unless you use your own cash or cash in your network) the only funding there is.. the goal has to be though moving towards bank financing so you get the best deal possible.. right now I am at 1/2 point and 7% and my bank pays for my appraisals.