I am currently under the process of appealing the appraisal done for my property in South St. Louis.  The property is a quadplex with each unit being 1Bed/1Bath, 2970 Sq ft, on  Minnesota Ave (63118).  I was HOPING the the new appraised value would come in around $170k. My realtor did a great job of putting together a thorough report of nearby comps. However, by the time the appraisal was done, some of the comps could not be used, due to being over 12 months old. Instead of coming in at the $170k appraised value that I hoped for, it came in at $143k.  I am pasting what the appraiser has stated about the suggested comps.  

***If anyone familiar with this area has other comps they suggest I bring to the appraiser's attention, please let me know!**

3134 S Compton Ave is over 12 months old.

2834 Wyoming is a two-family and several days away from being 12 months old.

3304 Wyoming is a two-family.

3215 Wyoming has been added to the report.

2732 S Jefferson has been added to the report.

Also - The deep dive into my BRRRR and the current status

- Purchased for ~$120k (downpayment ~$30k)

- Rehabbed for ~$25k

(Initial costs  ~$55k)

So with the above mentioned original appraisal coming in at $143k, after refinance costs, I would only get to pull out about $6,500.  The new debt I would take on would be $100k, rather than the current $89k.  With the higher monthly payment and only pulling out $6500, my cash on cash % return would not be much different, while inheriting more debt.

HOWEVER, I appealed the appraisal.  They have now given me a new appraised value of $155k.  With this, I would be able to cash out $15k.  So now, the numbers are looking more like this:

Without refinance:

$9000 annual cash flow / $55,000 inivested = 16.36% cash on cash return

Current mortgage balance of ~$89,000

WITH refinance:

$8400 annual cash flow / $40,000 invested = 21% cash on cash return

New mortgage balance of ~ $108,500.

Taking on additional $19,500 of debt, but receiving a better cash on cash return, and annual cashflow not dropping significantly.

So certainly an improvement, and it was worth while appealing the appraisal.  However, ideally I am able to appeal further and provide more data that gets more of a bump up in appraised value.  Any comps you feel would be good to bring to the appraiser's attention, please post here.  Help very much appreciated.  

Hey @Ben Kirchner ... I am currently going through a cash out refi on my 4 family on Virginia ave in 63118. I was hoping for an ARV of $230-$250 and it came back at $210k. These properties below might be very similar to your property. All are currently under contract so I would have your realtor or appraiser to call the selling agent to find out when they will closed as they could help with your numbers.

3822 Chippewa
4120 Michigian
4115 Michigian

@Ben Kirchner why are you investing in St. Louis? There are plenty of markets around Durham that offer cash flow.

You can't use duplexes as comps on a fourplex, you need other fourplexes. Comps can be over a year old but they are unlikely to use those if newer comps can be found. Appraisers can be very creative but just adding flooring or paint will not get you the ARV you desire. You need to speak with the appraiser and figure out how and what they use to figure out value. This is going to be hard to do if you're using a large national bank, you really need a local bank.

In my experience refuting appraisals is often a waste of time

@Caleb Heimsoth - What markets are you seeing good returns in, around Durham?  I do have 3 properties in Garner, that all rent for around 1.30% of purchase price.  However, these deals do not seem plentiful, and certainly not in Durham.  St. Louis has multifamilieswith good returns.  For the property this post is about, I'm getting $2225/mo in rent, with a $120k purchase price $25k rehab.  I pay utilities, but still a solid return.  

Disputing this appriasal was worth while, as it bumped from $140k to $155k.  The lender did include that it's rare that they see a dispute providing this result though.