Market comparables are subjective. Don’t believe me? Find a bank owned property in a nearby state and call five different realtors or appraisers in the area to ask them what they think the property is worth. Tell them you’re from out of town and trying to figure out what it would sell for if it was rehabbed. If you do get some help, which is rare in most areas, you’re likely to hear five different values.

That’s because the value is subjective to their opinion of the area, the subject property and their opinion of the properties to which they’re comparing it. For each professional it will be different.

This is scary to banks and exactly why they have appraisal reviews. The banks have been screwed for way too long by overly ambitious mortgage brokers and inflated appraisals and they’re doing what’s necessary to make sure this doesn’t happen when they’re loaning money to investors and homeowners.

What I say now, I say very carefully so as not to be misunderstood: You can get an appraisal on a property for almost any amount you want, as long as there are good comparables to justify it. I’ve seen way too many times where an appraiser appraises a property for a few thousand dollars less than the purchase price and messes up a deal for an investor. This is largely due to their subjective opinion about the market and the house. Bring in another four appraisers and you’re likely to get at least two of them to find the few thousand dollars you lost with the first one.

For this reason, it’s vital that you have a good, honest appraiser working with you. Finding out what they think of a property before you purchase it can be priceless. Knowing that you can add so much to the value of a property if you just fix certain things, can do so much good for you as an investor.

If your target is $110k for the appraisal when the property is done, you can even submit comps to them for consideration to get the appraisal you need. Having your hands on every part of the process is vital. This is just one more way you can edge your way in - without crossing boundaries to get the value you need.

Tuesday’s Tip: Don’t be slipping your appraiser a twenty on the side. Get to know them and understand what they do. It will save you ulcers and jail time.