By the Numbers
Appraisal Overstated ARV by $800,000
Location: Massachusetts
Issue
The appraisal supported a projected ARV of $2.6M.
What Happened
The property ultimately sold for $1.8M after sitting on the market for more than 13 months.
Impact
- Investor loss exceeded $350,000
- Junior lien investors were not repaid in full
How We Would Have Flagged It
✓ Comparable sales selection
✓ Market absorption
✓ Exit strategy assumptions
✓ Stress-tested resale value
✓ Previous construction jobs on luxury flips
Independent ARV Increased Property Value by $126,000
Location: Philadelphia
Issue
The agent estimated an ARV of $340,000.
Our Analysis
We identified closer renovated comparable sales within 0.2 miles, supporting a significantly higher valuation.
Result
The property appraised at $466,000, allowing the investor to complete a full cash-out refinance.
$150,000 Construction Draw Disappeared
Issue
The general contractor appeared qualified but was never thoroughly vetted.
What Happened
- Contractor disappeared after receiving over $150,000 in draw funds.
- Work was never completed.
- Investor was left with an unfinished project.
- Lenders and Investor scrambling to figure out what to do
How We Would Have Flagged It
✓ License verification
✓ Prior project review
✓ Draw schedule recommendations