(The 2 years allows me to house hack for free since I am stationed here for 2 yrsPre-context:-VA funding fell through at appraisal because he had non permitted renovations and was using the property as a 5 unitPM me for more infoThank you!

Once the market shifts (like we are seeing now) and appraisals start coming in low, lending becomes tighter, it will be much more difficult to have an exit strategy. 

Owed is around $550k, $275k 1st, $271k 2nd, BPO is $295k, both lenders came back with appraisals of $360k (the 1st) and $350k (the second) using nonsense repair estimates when she was in BK recently.

Make sure you have good comps on similar properties because you'll be paying for appraisals, etc.  

Using the BRRRR method, you can actively increase the property's value, which is then reflected in a new appraisal when you refinance.

Immediately if you want leverage to be based off purchase price + verified rehab. 3 months if you want leverage to be based off new appraised value.

Until then, its merely appraised value....paper equity.

But as soon as their is a sale of the property - that differential goes away and the property appraiser is free to tax it at it's "just value" - which is usually some percentage below what you paid for it... like 15-20% less than what you paid.  

The properties were appraised, and the bank gave a line based on 70% the value of all the properties.

I've seen folks say things to me like, we spent 400k to build and then the house was appraised at 550k upon completion.