Advice on Equity I NEED HELP! Apprasail experts Please.

[Josh Keeney]

Hey all,

I was talking to another investor in the area (York,Pa) and telling him about how I plan to fix up the kitchen and bathroom in a home I'm living in, which is a duplex 3bd/1bt and 1bd/1bt.  Then I planned after about 6 months to pull the cash out with a Refi through a credit union. I bought the house at 50k and the home was appraised at 63k.  I was hoping with the work I did on the kitchen and the bathroom that it would at least be appraised for 70k so I could draw at least 12k to 15k out and invest in another property.  He told me that unless I actually add sq ft or rooms not to expect the appraisal to go up because it will be based on purchase price of comps in the area, not so much what my home looks like.  Has anyone faced this problem, does anyone have any insight into appraisals? I don't want to watch the couple thousand fixed up a home for it not to go up in value. Any insight for those that have been through this process would be appreciated. Thanks! 

[Andrew Postell]

@Josh Keeney this is one of the more difficult questions to answer.  The comparable properties in your area are the key to understanding what you value will likely be after renovations.  You will have to pay close attention to how these properties are in their condition.  If a property has quartz counter tops and you are putting in granite...it won't appraise at the same value. Even the condition of your your renovations could have an affect on appraised value.  And what's even more frustrating is what if the appraiser states your home is worth $67k after renovations?  After all we are relying on a person's opinion on the home.  So plan accordingly and don't count on the home appraising exactly at the value you estimate but more around the value you expect.  I hope this helps in some way.