Yes the government wants the "magic fairy dust" as I call it.I see it with banks as well.Sometimes the bank believes in an appraisal that won't fetch half the value.Since it's a "third party" appraiser they believe it to be most accurate.The problem is appraisers aren't in the field talking daily to investors doing deals like I am.Even if I can convince the bank they tell me they agree with my value and comps it's just that right now they can't take the hit.They can only take small hits over time.The government I am sure sees this the same way.As an investor I wouldn't want to be "in bed" with the government on houses.They have shown not to be good stewards of money or to make thoughtful programs that work in the real world.That leaves you intertwined with the government for years and years which I would equate to a nightmare situation.As far as the SS or REO driven market it depends on your local area.Some areas only had a few foreclosure to begin with and have already recovered.Other areas a foreclosure and short sales can be up to half of all sales still today.The reality is the buyer when looking at a remodeled house versus one needing work will go look at the REO or short sales.Then the buyer will compare in their mind IF they want to do the work to gain sweat equity or just pay for a finished product??

Assessed value is based off of what the county auditor has on record, and the appraised value is done by an independent third party, and done with much detail.

I continue to fix and flip, buy and hold does not work where I am at and I am a tired out of area landlord.I have also started investing in notes, have 2 already and working on the third.

We are looking to close on a third property in the next couple months that is a fully rented duplex, have the 25% to put down.  

It's a duplex with a third nonconforming unit.

TD Bank and Third Federal look attractive but I don't have your scenario info to know what you qualify for.http://www.bankrate.com/funnel/home-equity/

I just started going to a local Real Estate Investors meet up group in Peachtree City that is meeting on third Tuesday of each month.

My addresses are all in Excel and we're doing all handwritten, self-mailed letters so now third-party company managing the data for us.

Los Angeles stats:(1) Bull market (first quarter of 1975 through the third quarter of 1980): real home price increased by 69% over 23 quarters.Bear market (1980 Q4 to 1984 Q2): real price decreased by 9% for 15 quarters.(2) Bull market (1984 Q3-1989 Q4): up 67% for 22 quarters.Bear market (1990 Q1-1997 Q2): down 37% for 30 quarters.(3) Bull market (1997 Q3-2006 Q4): up 166% for 38 quarters.Bear market (2007 Q1-2012 Q2): down 43% for 22 quarters.(4) Bull market (2012 Q3-2015 Q1): so far the price is up 27% for 11 quarters.If history is any guide, the L.A. housing price cycle seems to last about 12 years on average, of which seven years is spent in the bull market with at least 65% real price appreciation, and five years is spent in the bear market.

A good contractor might ask for a third upfront but you can work with them on that.