The rest of the land isn’t really easy to build on so It is virtually worthless to you.Let's say you paid $5MM for the facility based on NOI and the land came with it, virtually free.So you decide to get the property appraised for development value and donate it to a land conservatory.The appraiser runs some comps on other land recently purchased to get you a value.They come back and tell you the current development value of that land is $50,000 an acre. $50,000 times 15 acres equals $750,000.You give that $750k development right to an agency, and It is treated as if you gave $750k to the Red Cross.It's a huge deduction.Depending on your tax bracket, that tax deduction could be worth several hundred thousand dollars to you.It's a pretty big deal.

There are, more or less, three things you can do (other than just sucking it up and going with the low appraisal):1) Try to convince the appraiser to increase the appraisal.

The property appraisal came in at a 5.3% increase versus our purchase price. 

Thanks for your suggestions.I got only commercial real estate, but I need residential properties.Is any source for property appraiser for Canada.Thanks,Neelam

The only thing you typically have to pay up front is the appraisal (which can hopefully be paid for with CF from that property).  

Well I can say i question who and how accurate the appraisal  is because  they can not go in side the property, that would be trespassing. 

You'll want to collect research that goes far beyond the documents and reports provided by the sponsor.I'd work my way down this list when looking at the buildings: Specific to the properties: Acquisition Costs, Environmental Reports, Appraisals, Property Condition Reports, InspectionsBecause these are likely commercial properties, much of the value is connected to the tenant, so evaluating the tenant becomes crucial: Conditions of Leases (duration, escalations, extensions), Balance Sheets, Competitors, Historical Performances, Credit Scores, Macro TrendsLocal market factors that you are used to pulling: population density, population growth, unit type inventory and growth (multifamily), median income, etc...Financing terms: interest rate, principle paydown plan, cash sweep options...Offering model: management plan, operations, asset management, exit strategy.Sponsor track record: Every sponsor has a list of the previous offerings within the PPM.

Will the appraisal be an issue coz we bought it for 370 3 months back? 

This is mainly because we know the cash flow numbers upfront with a STR, since you can use AirDNA projected revenue to qualify a deal and don't have to wait on the appraisal to give us LTR market rent.

I am arriving at this conclusion because the appraisals relied upon for the BRRRR method in these lower tier neighborhoods rarely equate to actual results in an arms length transaction.