Foreclosure Valuation

use tax appraisal for market value. You need to use sold comps for the last 90 days. That is what the banks use.

Typically the last sold price - the price at auction, becomes the new appraised value. There are exceptions, such as a complete rehab that will increase the value. However it's very rare you can purchase a place for $90k, and simply turn it around and sell at $200k. You need to do some rehab work and show the value you added.

I would suggest asking the bank (hopefully a local one) about a construction loan using the standard 70% of ARV. They would do an appraisal for the fixed up value and loan against that instead. When I say local bank, they're far more flexible versus a bank one (Wells Fargo, Citi, etc).

- Tom

Meant "big one" on the last sentence. Local banks are more flexible versus big national banks.

This is what I was told by my local bank. I was attempting to borrow 105k to purchase and wrap up another loan to decrease monthly expenses. Thank you for your response. This is very helpful to me in pursuing future deals.

thanks again,
Brad

Actually, if the market area is driven by foreclosures then your appraised value will be driven likely by other foreclosed properties in the neighborhood. My recommendation is to get a realtor run a quick BPO (Broker Price Opinion) for you, using the last comps within 90 days and 0.5 mile radius. This will give you a good indication of what the price of your property would bring right now and as-is.