All Forum Posts by: Clint Dorris
Clint Dorris has started 5 posts and replied 77 times.
Post: Are 39% of Appraisals wrong??

- Jackson, TN
- Posts 79
- Votes 21
That is one of the weirdest forms in appraisal. It is a good one because the page before the one you posted and that page figure all the major expenses, including reserves for roof, AC, etc. If everyone looked at that form, it would let them see the REAL cost of owning a property, and figure that their actual cash flow isn't what they thought.
Here is where it gets weird. That form has a place for both the appraiser and the lender/underwriter to fill in. I don't love that. But, in my office, we don't fill in monthly housing expense, because we don't know it. Normally, I am not privy to the mortgage rate or insurance costs. This is why the lender can fill that in. They can also adjust the reserve costs the appraiser fills in.
So, I don't know if this is an appraiser mistake, or a lender/underwriter mistake.
I will say that I know appraiser who fill that form out b/c it is require, but who don't pay much attention to it. Once I started owning property, I realized how important it was, and started paying more attention. Now, when I get an appraisal on my stuff, I go straight to that page because I get a 3rd party view of my potential cash flow.
Post: Are 39% of Appraisals wrong??

- Jackson, TN
- Posts 79
- Votes 21
The condition and quality rating thing is a relatively new appraisal requirement. UAD appraisals require a condition rating of C1-C6 (new to terrible) and a quality rating of Q1-Q6 (Beverly Hills to Backwoods shack). The indecision comes over what is a C3 and what is a C4. There are specific definitions for each, but it is a judgement call. Has the entire house been updated, or just half of it? Over the last year, lenders have access to this data and can compare what appraisers are rating the properties. A lender might come to me and say, you called this a C4, but other appraisers call it a C3. The problem is, appraisers don't have access to this data, so I have no idea why another appraiser called it C3.
My guess is that the differences in this article have to do with the above. It doesn't necessarily mean that the values are wrong, but the ratings differ.
As far as values go, the definition of an appraisal is an OPINION of value. So, yes they can differ between appraisers. They can also differ between buyers. What I see on this site is investors wanting a value that gets them a loan. There are good and bad appraisers and investors. And, investors can know value better than an appraiser, particularly in their niche. But, if it is a good appraiser, and the numbers don't match yours, you might want to consider it a warning sign. While there are bad appraisers, most of them are professionals who look at these numbers and comps every day.
Finally, on to the issue of appraisals coming in at contract. The rough definition of market value is a motivated buyer and seller under no outside influence. Do we look at the contract? Yes. We likely are influenced by it. But also, most houses sell for market value. Ask a realtor. It's hard to sell a house too high. And, if it is low, there will likely be competition. A motivated buyer and seller usually wind up at true market value (not an appraisers opinion). If not, the buyer moves on to the next house. This is called the principle of substitution. It's why we use comps.
Post: Jackson, TN Real Estate Agent

- Jackson, TN
- Posts 79
- Votes 21
And my number is 731 234 0155
Post: Jackson, TN Real Estate Agent

- Jackson, TN
- Posts 79
- Votes 21
Lance,
@David Cook is correct. I am an appraiser in Jackson TN, and I own some 2-4 family stuff and I appraise a lot of it. Give me a call and I'll see if I can help you (I don't mean hire me, just call me and I'll tell you what I know).
Post: Found my first possible deal!

- Jackson, TN
- Posts 79
- Votes 21
Good points @Scott DeMichele
This is not to start an appraiser/inspector war, but I think we have unique vantage points. In a perfect world, you need neither. You know your values, and the price is good enough to offset any repair issues. In the real world both have their place, as do contractors.
I know you didn't mean it as a slight, but we don't all just tell lenders stuff. I know value, better than most (not all) investors and realtors. And, I doubt a first time investor knows value better than a GOOD appraiser. In a perfect world, you would know an appraiser and an inspector, who both own property. Then, you can get around some of the legal/technical stuff we are required to do, and ask the questions that matter.
Post: How to add $15k of value?

- Jackson, TN
- Posts 79
- Votes 21
This is probably specific to your market. In my opinion, items like that need to be done either way. New floor covering may not always add so much as NOT doing it may be taking it away. The question is, did the last appraiser ding you in Value on the appraisal?
Also, I wouldn't assume that appreciate and count on it for the appraisal. Even when houses are generally going up 2% a year, that is just a statistic. The appraiser will use the comps from the last 12 months, so it is really just a snapshot of the last 12 months. They may be higher or lower than that. I'm not saying the number isn't true, just that I wouldn't use last appraisal + 2% as math that might translate to the next appraisal.
$1500 per bath sounds like a good upgrade. $7000 for carpet on steps and bedrooms sounds high. Maybe I read that wrong.
I know we are investors here, but this is your home. Spend the right amount of money to make your family comfortable and happy in it. Hopefully, that will help your situation, but making your family happy is better goal. I hope its a win-win for you.
Post: Appraiser claims i might need to construct a Seawall..

- Jackson, TN
- Posts 79
- Votes 21
Honestly, its hard to tell what FHA wants. They just put out their new handbook, and its over 400 pages. I'm not familiar with your area, but there is some wording in FHA stuff that implies that things should meet local codes and be typical of the market. So, even when something isn't a direct FHA violation, they may fall under these "catch all" rules.
For instance, FHA doesn't say walls have to be painted, but my market expects decent walls. I wouldn't call for it if it were just a normal house that needed touch up, but I would if the house had bare sheetrock because the market expects something.
I know nothing about seawalls.
Post: Found my first possible deal!

- Jackson, TN
- Posts 79
- Votes 21
If you are sure on your value, getting an appraisal would be a waste of money. Long term, I think you need to know value good enough that you don't need one.
However, knowing an appraiser is not a bad idea. Most appraisers do lending work and only want appraisals from lenders that pay them $350-$550. However, you might could get an appraiser to do a drive by or just look some stuff up for you for $150-$200. I
f you called me, I'd look it up for you for free. Technically, when doing "verbal" work, we have to say that it's not an appraisal and just give you general numbers of comps, as opposed to doing an actual appraisal. But, I always help my investors, realtors, and clients for two reasons: I want to know investors and how they think and what they are doing, and I want to be the first guy you think of when you do need an appraisal or an expert on value.
Post: Correct way to evaluate a 4-plex?

- Jackson, TN
- Posts 79
- Votes 21
@Austin DavisYes, we keep a list of rentals, but not necessarily GRMS. It can actually be a bit difficult to tell. I work for a good bit of investors, and I also use a management company for my personal stuff. Finding rents is the easy part. However, the investors I work for, who tell me rents, those aren't recent sales. So we normally update our GRMS base on current sales. We pull recent sales in the areas where we have our rent rates.
I don't know much about CAP rates because I deal with them so little doing mostly residential work.
However, the easiest way to get rents is to just drop by a management company and pick up their sheet of available rentals. They usually rent for what they are advertised at. Many of them keep them online now, too.
Post: Correct way to evaluate a 4-plex?

- Jackson, TN
- Posts 79
- Votes 21
Looks like that isn't very readable w/o zooming in. I can upload a pdf if I knew how/where.