What Every Appraisal Should Tell You Before You Flip
Before you swing a hammer or close on your next investment property, one number matters more than most: the appraisal. For fix and flip investors, the appraisal is more than just a formality - it’s a blueprint for your deal’s profitability.
In this post, we’ll explain why appraisals are critical, what to look for in one, and how the right lender—like Barnett REI Finance—uses appraisals to help investors build smarter, more profitable flips.
Why Appraisals Matter in Fix and Flip Projects
An appraisal is a professional opinion of a property’s current (or future) market value. In a fix-and-flip scenario, this valuation is used to:
Secure funding for the purchase and rehab
Analyze ROI potential before starting work
Compare comps and set a realistic after-repair value (ARV)
Without an accurate appraisal, you could overpay upfront or underestimate your resale value - both of which can kill your margin.
Key Things Every Appraisal Should Reveal
Here’s what to look for in the appraisal report:
Current Market Value
This is the property’s as-is value, and it determines how much funding a lender may offer. It’s your financial baseline before renovations begin.
Comparable Sales (Comps)
Your appraisal should include recently sold homes nearby that are similar in size, age, location, and condition. These comps help justify your expected ARV.
Neighborhood Trends
Look at local data for:
Time on market
Price per square foot
Demand or renovated homes
The right neighborhood indicators can signal whether your flip will move quickly or sit.
Repair Adjustments
Some appraisers may estimate the post-renovation value based on your improvement plan. This can help validate your projected ARV, especially if you’re using a loan based on future value.
Red Flags or Unique Factors
Appraisals can also highlight things you may miss, like:
Odd lot layouts
Zoning issues
Overbuilt square footage
Proximity to noise or undesirable features
These small factors can have big impacts on your resale price.
Pro Tip: Appraisals and Lenders Work Together
At Barnett REI Finance, we use appraisals as a tool to underwrite smarter deals. We’ll often request or review an appraisal that supports the as-is and ARV values, ensuring you’re not overleveraging on a risky deal.
A strong appraisal:
Increases your approval odds
Speeds up funding
Confirms your number before construction begins
Final Thoughts:
In the fast-paced world of fix-and-flip, it’s tempting to rely on gut feel. But seasoned investors know: profit is made in the numbers, and the appraisal is where those numbers begin.
With Barnett REI Finance, you’re not getting funding - you’re getting a partner who believes in data-backed decisions.