Getting credit for in place rents on a refi appraisal when rents were raised mid year

Take an 11 unit property bought with rents at 950 across the board, where market now supports 1,150 and 7 of the 11 have already been turned at that number, with four still on legacy leases rolling at staggered dates. T-12 gross collections might show about 118k. T-3 annualized might show 131k. Contract rent on the current rent roll, taken times 12, might show 133k. An underwriter basing value on T-12 with a vacancy and credit loss factor while only considering the T-3 creates a real swing, in this example about 13k gross, which at a 6.25 cap and a 55 percent expense ratio works out to roughly 90k of appraised value. Two things generally matter here. First, what actually gets an owner credit for in-place rents rather than trailing. Most lenders use a seasoning convention, often around 90 days of collections at the new rate per unit, though plenty of it comes down to underwriter discretion. Loss to lease on legacy units is real and shouldn't be ignored, but it shouldn't be double counted either, once through trailing revenue and again through a market rent adjustment. Second, nonrecurring expense items matter just as much. A roof repair booked as a repair rather than a capital item sitting in the T-12 operating line will come straight off NOI and off value at the cap if the underwriter takes T-12 expenses as reported, on top of any revenue haircut. Underwriters will often strip nonrecurring items when handed the invoice and a schedule showing it isn't part of ongoing operations, though that argument is weaker once it's already booked that way for more than one period.