Posted by: darren bird ®
02/07/2005, 12:20:24
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All of the appraisals I have been involved with had to do with arranging financing or refinancing for properties that I own (so to answer your question, they were for lenders). In every case I have personally seen, the appraised value is higher than the “market” value or street value. This is especially true of some of my more “rustic” rentals. What I am saying is that all of the appraisals I personally have been involved with have come out higher that what the property could sell for in the marketplace, or at least on the very high end of market values. I suspect that my experience is not unique, but perhaps you can shed some light on this, as I am sure you and others on this board have seen your share of appraisals as well. If I am right then my original question is still valid. What would be wrong with marking up the property to the appraised value to sell on a RTO deal? You talk a lot about “making your profit up front” by finding good deals then selling to a RTO buyer for current market value. I say why not mark it up to at least the appraised value? That is still fair to my way of thinking, and it would not overvalue the property so the buyer can still achieve financing when the time comes.
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