Appraisal comes in higher than comps?

[Anthony Jasmine]

Looking at a keyturn property. The rehab looks great, but the appraisal comes in 30%-40% higher than the comps in the same neighborhood. Would this be a bad investment? Looking for a long term hold for cash flow.

[Erik W.]

Residential appraisals are flaky.  Usually they come in at whatever is needed to make the deal work.  I've had appraisers ask me, "What are you hoping to get out of this?" in advance....and tada!  It comes in at exactly what I needed to get what I wanted.

Agreed with others what we need to know who did this appraisal (broker, lender, flipper). Also, what is the property type (SFH, 2-4 units residential plex, small MF, etc)? "Appraisal" has many meanings depending on to whom you speak. "ARV" numbers tossed around by flippers and turnkey providers are often little more than ball park guesswork.