And I’ve seen many appraisals, far off the mark as well.

But the lenders have been a nightmare, there was a small amount of seepage in the appraisal and they want it fixed before close.

I just got it appraised for right over $800k. 

Automated appraisal.

But using your formula, the investor should have made $210K at minimum, or $350K, which means the house would be appraised at $410K-$550K.

Get the cost analysis and blue prints done and work it out with the construction loan committee and start the work draw phase.The other options which can be a little easier is buy a home that will pass an Inspection/appraisal and not be "Subject to" but does need a lot of TLC/renovations and do it yourself.

During underwriting, preliminary title searches, insurance procurement, and appraisal arrangements are initiated.

I’m just trying to I guess get an appraisal on my rental and see if I can cash out refi my house to pay off some personal debts.  

@Peyton LaBarbera - From my experience doing foreclosure auctions in CT, you need to have a cashier's check for 10% of the "appraised value" which is defined in the foreclosure writeup.  

Bought for 305k appraised for over 350k in AS-IS condition.