Determining Value When There are Little/No Comps in the Area

[Andy Cross]

We've got a lead in a rural area of Southern California; north of LA. This lead has potential to be a fix/flip or a rental.

However, there is only ONE comparable within the last 3-6 months. All the other properties that were recently sold were built 30-40 years later, and are all rehabs.

I feel I cannot determine value just off this one comp.

I've spoken to realtors in the area, and they all have sent me the same list of comps; thanks, but I pulled this same list from Redfin.

How do I make an offer with only one comp and no budget to consult with an appraiser? 

[Dave Passey]

This is always a tricky situation. 

Whenever I have something like this happen, our safe bet is to go low. You might not get the deal because of it, but no deal is better than a bad deal. 

Having no comps is tough because essentially the sales price is whatever someone is willing to pay for it. I have a house that I have under contract that we are about to sell and I feel like it should have been able to sell for about 50k higher than we sold it for, but the fact of the matter is that there were very few comparable properties and it is a higher end home. We are still going to make money on the deal, but it could have been a lot more based off of the "comps". 

The only reason we were able to get this deal to still work for us is because I contracted it low enough so that we were safe. 

Good luck out there and happy investing!!