Rural Investing.

[Nathan Gasti]

I am looking at a set of duplexes to buy in a rural CA town.  The seller is offering seller financing and I am trying to find the right price to offer. I can not find any comps in thr area. What would be the best way to value this property? I was thinking about shooting a low low offer to alleviate some risk or possibly doing a cash flow analysis on them. In total there are four units. Two that are tenanted and two that need to be rehabbed. Any advice is appreciated, Thanks!

[Mike Makkar]

Hi @Nathan Gasti I've looked at rural parts of my region as well, where official comps don't exist. First, I look for rental rates on Zillow or hot pads. If those come empty, I advertise the property for rent before I intend to buy. For rural areas, FOR-RENT bandit sign on farm road intersections or a flyer at the local church works best. Craigslist postings are hit or miss. If I get a bite from a prospective tenant, I try to get the local rent, then my buying price becomes 50x the rent rate. ie. if the rent is $1500 per month, I offer $75k for the property. This follows the 2% rule. Expect to spend an hour to do the "physical" rental analysis that I suggested. Well worth the effort before sinking your money into out-of-town investments