Our agent did comps and we made the best offer we could afford, based on the condition of the home. 

I'm based in the North Bay Area California. 

Quote from @Brittney Wright: Increase the rent based on what the market supports.

Or is it just based on tenant reporting?

Underwriting is primarily based off of the property not the borrower. 

$1,400 x 12 months x 5 years = -$84,000.Net Worth ROI Calculation (new situation):Appreciation: $108,280Loan Paydown: $31,807Tax Benefits: $0 (b/c you aren’t cash flowing)Rent Avoidance: -$84,000Total Net Worth Increase: $56,087ROI = 56,087/25,000=224.35%Simple interest rate of return = 18.7%/yearHouse hacking can be a great way to build wealth and get into the real estate game.

It seemed the appraiser knew EXACTLY how much I was looking to borrow and solely based the results of the appraisal on that.

Your unfortunate experience is summed up in the word ‘trust’.

You will also need knowledge of the game and the areas you choose to lend in, not knowing your areas or having someone on your team who does could spell a loss.

I just had to share this as it's been a complete game changer for the performance of our company.