Hi everyone. First time post here. We found a 6 plex in our area that meets most of our cash flow requirements with about a 12% COC return. Problem is the appraisal came in much lower than the asking price of $360k. What are some options? Do we put more down? Walk away? Thanks in advance. Love the bigger pockets community.
Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
6y
@Thomas Mitchell I would look long and hard at the appraisal to see why it came back so low. Besides the purchase price, did you pull any comps to make sure it was a fair price?
Some lenders will let you make up a short fall with additional cash down, some are not keen on that. Obviously, you can try to renegotiate the price. You can contest the appraisal, and ask for a second, or if there are issues with the first, you can send backup to the lender to show why it should be higher.
Hi everyone. First time post here. We found a 6 plex in our area that meets most of our cash flow requirements with about a 12% COC return. Problem is the appraisal came in much lower than the asking price of $360k. What are some options? Do we put more down? Walk away? Thanks in advance. Love the bigger pockets community.
If the appraisal is accurate and holds then you need to decide if you are ok with the cash flow and not the value. In this current environment it'll about cashflow not appreciation. If you put additional money down or ask for a second that will change your COC so it really comes down to the numbers and your goals.