Turnkey Investing - Paying over appraisal price
Would you ever pay over appraisal price for a turnkey investment property?
This is apparently not uncommon in the turnkey investing space. I wont name the company I'm working with, because I do respect them, and believe they they're one of the premier operators in this niche, but my appraisal came in lower than contract price.
I understood turnkey pricing essentially equated to 'retail' pricing, if you will, and can justify retail pricing based on risk model and the passive approach, but the questions remains:
Would there be a case for OVER market pricing? Appraisal lower than contract price.
Most Popular Reply
I would not pay over appraised value, ever. As a TK seller, I just sold one to a BP user where our sales price was $99,500. Appraisal came in at $97,000. I ate the $2,500. I could not see why my investor would be interested in paying over the appraised value. My bank when I bought it appraised it for $100,000, so I thought the $99,500k appraisal was a slam dunk, especially since I added granite counter tops in the kitchen and bathrooms. Rent was $1,095 at 8% mgmt as a FYI.
- Alex Craig
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