What can I do to value add and maximize my appraisal?

4 Replies

I subscribe to the BRRRR strategy and have completed 2 deals so far. I’m scoping out a couple multifamily deals in the Cleveland area and am wondering what I can do in the local market to maximize my investment dollars relative to my ARV appraisal. Anybody an expert in the appraisal logarithms?

I'm not an expert by any means but I'd try and do what Brandon Turner preaches and look for 'a hidden bedroom' (for example, if it's a 2-bedroom home and it's 1000+ sq.ft. then you can likely 'move some walls' to make a third bedroom; this would almost certainly add to the home's value). 

@Whitney Bowling I never really know what they are going to like. I had one Appraisor who was very impressed that I used high quality materials-he got this impression because I had granite countertops and double hung windows. Everything else was pretty darn cheap but it LOOKED really nice. I picked nice paint colors, a nice light gray on the interiors, a nice pale blue in the bathrooms and an awesome slate with white trim on the exterior. I also had nice ceiling fans (I love nice ceiling fans becuase the always wow tenants and are only about $50 more than the basic ones). So go for some impressive stuff like this an maybe you can wow your Appraisor (and your tenants) like I did.

Hi Whitney,

What part of Cleveland are you investing in (cross streets would be best)? The Cleveland market can vary from city to city and neighborhood to neighborhood so it's hard to say without knowing the exact location and tenants you'd attract. In West Lakewood, your value-add opportunities are much different than in Edgewater, Rocky River, or Ohio City. 

Generally speaking, if you can add an extra bedroom or bathroom, that should increase the value a bit pending on the area. The question you need to answer is "Will what I'm about to do to the house make people pay more rent?". Sometimes a new kitchen will do that, other times it won't move the needle on rent. 

Originally posted by @Whitney Bowling:
I subscribe to the BRRRR strategy and have completed 2 deals so far. I’m scoping out a couple multifamily deals in the Cleveland area and am wondering what I can do in the local market to maximize my investment dollars relative to my ARV appraisal.

Anybody an expert in the appraisal logarithms?

  • Roof
  • Furnace
  • Hot water tank
  • Electrical system
  • Windows
  • Driveway
  • Kitchen
  • Bath