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Alex Frantzis's profile image
Alex Frantzis's profile image
Alex Frantzis
  • Investor
  • Member since Mar 2, 2025

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Alex Frantzis's profile image
Alex Frantzis's profile image
Alex Frantzis
  • Investor
  • Member since Mar 2, 2025
Alex Frantzis
  • Investor
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Private Lending & Conventional Mortgage Advice

Question about DSCR, why is my appraisal so much lower than my rent collection

Alex Frantzis
  • Investor
Posted

So I closed on a 4 unit mutli back in december that was 75% occupied, on MTM and well below market.  I bought for 425k in one of the best neighborhoods in Cleveland, great rental demand, close to city center and walking distance to everything.  I put in about 90k in renovations and upgrades and now fully occupied (last lease is being signed today) collecting $7200/month in rents, with all tenants now on 12 month leases.

I am in the process of refinancing under DSCR but the lender's appraser came back at $575k valuation, as I am looking to cash out on this one.


My question, is it common for an appraisal to come in that low, especially with 7200 in rents a month coming in?


Thanks for any guidance, just wanted to see if it was worth shopping around or just closing it at 575k valuation and moving on. 

  • Alex Frantzis
    • Cleveland, Ohio
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    Matthew Crivelli's profile image
    Matthew Crivelli's profile image
    Matthew Crivelli
    • Lender
    • from MA
    • Member since Mar 1, 2021

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    Matthew Crivelli
    • Lender
    • from MA
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    Matthew Crivelli
    • Lender
    • MA
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    Matthew Crivelli
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    • MA
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    Appraisal is not based on cap rate. They are using sale comps. If it was a 5+ unit building cap rate would come into play. 

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