Rental Property Investor · Temecula, CA · Member since 2019 · 128 posts · 54 votes
I'm rubbing the magic lamp that is the collective BP genius in the hopes of finding a way to "guarantee" a high enough ARV appraisal to pull my cash out in a 75% LTV BRRRR refi...
Real Estate Agent · Cleveland, OH · Member since 2019 · 359 posts · 295 votes
6y
Do not pay the appraiser to get on their good side that is illegal lol. Appraised values can typically vary from 10-15%. It is best to help yourself by providing a full list of improvements completed on the property and you are also able to provide comps that you feel best suit your property (no guarantee they'll use them but many appraisers don't mind at least taking a look). Be sure there is no damage and like @Justin Fox said, if the neighborhood can't support your improvements then don't do it. There is really no magic to it...anything beyond being prepared and having your house completed/in order is probably undue influence as the appraiser is supposed to act independently and all data must be supported by market trends and comps.
Lender · United States · Member since 2020 · 1k+ posts · 499 votes
6y
Appraisers haven't been on my good side lately. My client is doing a portfolio loan of 6 properties for a refinance and 3 of the 6 properties came in about 10-15% lower-than-expected and the comps support the opposite.
I know people that give the appraiser a few hundred dollars to get on their good side, but I question if this is legal, lol.
Software Developer · Vidor, TX · Member since 2015 · 922 posts · 639 votes
6y
You should have an idea of the appraised value before purchasing and renovating. Stick to the quality and finishes of alike, SOLD comps and you'll get a good, accurate appraisal within acceptable margins. If you go above and beyond the comps on the renovation, be prepared to not get paid for it at closing. If you have the power, you can kill deals until someone brings money to the table. In this case, however, I doubt you want to pay for multiple appraisals.
Real Estate Agent · Cleveland, OH · Member since 2019 · 359 posts · 295 votes
6y
Do not pay the appraiser to get on their good side that is illegal lol. Appraised values can typically vary from 10-15%. It is best to help yourself by providing a full list of improvements completed on the property and you are also able to provide comps that you feel best suit your property (no guarantee they'll use them but many appraisers don't mind at least taking a look). Be sure there is no damage and like @Justin Fox said, if the neighborhood can't support your improvements then don't do it. There is really no magic to it...anything beyond being prepared and having your house completed/in order is probably undue influence as the appraiser is supposed to act independently and all data must be supported by market trends and comps.
San Francisco, CA · Member since 2018 · 46 posts · 14 votes
6y
@Account Closed Is there a way to get the best numbers out of the appraiser? How can we be so sure they'll give us the number we want or even close to?
There is no guarantee on an appraisal, but there are key components in every project that will improve the value of a property. It is very similar to flipping a property. Kitchens and bathrooms getting you the best return. Finishing a basement will bring in value as well. When your deciding on the value of your property look at sold comps. How do the comps compare to your property; number of bedrooms, number of baths, updated kitchen and bath, finishes, and most of all is everything done. There is no work for a homeowner to do. In my BRRRR projects I tear out the kitchen and improve the layout, all stainless steel appliances, (the cost is minor compared to white appliances but looks so much better) open up walls for the open concept, gut the bath minus the tub (refinish the tub), new flooring (mostly hard woods), replace windows if necessary, new six panel doors, paint the entire house inside, possibly paint the outside if necessary. The average rehab $30K-35K.
Give the appraiser the comps; addresses, sold comps and your rehab list of the property. Make sure the comps are good; same style of home, similar square footage, beds/baths and so on. Always Always met the appraiser at the time of the appraisal. It does help to explain how you improved the property. It’s time to sell your property to the appraiser. I have complete approximately 20 BRRRR's. This stuff works if you do it correctly.
Real Estate Agent · Cleveland, OH · Member since 2019 · 359 posts · 295 votes
6y
@Benson Gee Theres no way to be absolutely sure unless you're the appraiser himself. Appraisals are very subjective and can range in value across a pretty large percentage. For example, 1 guy can come in at $150k while another can come in at $175k. It's happened to me and I've seen plenty of field reviews (reviews on other appraisers work) that show this. The best you can do is to be prepared. Provide a list of improvements with everything you've done-you can even include a market cost estimate for each section. You can also provide comps that fit within appraiser guidelines to help out. No guarantee they'll use them but a lot of appraisers will at least take it into consideration and itll give them a gauge of what you feel the values worth. Not that they will do all they can to please you but itll give them a good starting point.