Refinancing two lots on one mortgage (bad appraisal) (Chicago: sales, apartments)

[echicago5]

Hi.

I'm having a bit of trouble refinancing my home and was hoping to get some advice here.

About my property:

I own two full-size lots in the city of Chicago.
The lots are next door to each other with nothing separating them.
One lot has a 4-story 3 flat on it and a 2-car garage (where I live and rent two apartments).
The other lot is vacant with a 2.5-car garage on it.
Both lots are pinned and taxed separately with separate MLS #'s.

I currently have one mortgage that covers both pins. I am trying to ReFi that mortgage to pull money out to invest in another property but am having trouble getting the appraiser to treat the property as two full size lots as opposed to one oversize lot. Said differently, he is not taking into consideration the market value of the second (vacant) lot. He has added a $30k land bonus value in the appraisal for the second (vacant) lot. Vacant lots in my neighborhood are going for $160k+ (there are three recent sales of vacant lots in my neighborhood ranging from $160k-$225k). The appraiser has both pins listed separately in the appraisal and has indicated that I have a 50 x 125 lot (two full size lots) but isn't treating them as such. It's as if he thinks we have an extra wide lot, not a full vacant lot where a second house could be developed.

I believe this is undervaluing my property by at least $100k and as a result not allowing me to pull the necessary cash out of my ReFi to make the additional investment.

A few questions:

Is there a way to refi both properties under one residential mortgage (which is how my mortgage is currently setup)?
Is there some reason the appraiser would not be able to appraise my second (vacant) lot at fair market value and include that value in my appraisal?
Can i request to have the lots appraised individually, then combine the appraised value to come up with a more accurate value for my property, and get one mortgage against the combined value?
What steps can I take now that the appraisal has come back significantly under market value (in my, and my realtors opinion)?

Any advice or ideas on how to get my property(ies) appraised at market value would be wonderful.

Thanks!

[chet everett]

The appraiser is almost certainly basing their valuation on the CURRENT USAGE, a valid consideration as that is the way the MORTGAGE that covers the properties is almost certainly structured...

If you are contemplating selling the second parcel and retaining ownership of the 3 flat you might want to consider doing that before you refinance as I suspect pretty much every lender is going to have problems allowing you to tap the ephemeral land value of the saleable lot with the garage on it...

Once you join or separate individual PINs on a lien lenders are reluctant to look at them any other way -- should you get into any kind of financial trouble or even have a tradesperson file a mechanic's lien the ensuing mess would negatively impact both parcels. I have tried to buy adjacent parcels as well a have an oversized parcel subdivided and there are additional costs / time involved -- it is not so much that the appraiser is unwilling to "give you fair market value" but that lenders will prefer any appraisal that reflects the way the properties are financed and used...

[echicago5]

Thanks for your quick and detailed reply, Chet!