Appraisal Bias on BRRR
I'm looking at a property in Philadelphia that would need a full gut rehab. I want to BRRR it. Purchase price is 99k, renovation cost is ~100k. ARV maybe 270-280k.
My question is regarding the appraisal value. It's located in an area with a lot of similar renovations, but that are a few blocks away. If you know Philadelphia real estate you know that it's very block by block where some are good, but the next one over could be bad. This house is on a nice block, but it's pretty isolated from the renovated houses and I don't think would be considered by a homeowner looking. However, I think it would be great for a renter. Do appraisers have the same bias towards location that a homeowner looking to buy a house would or would they just look at what houses in the area sold for?
What I'm getting at is, based on houses sold in the area and condition of those houses I think the ARV could allow me to refinance out all of my capital, but I'm depending on the appraised value to be unbiased. What has been your experience with BRRR?