How to run comps with no comparable sales in same area

[Keri Dichiara]

I have come across a few properties that did not have any similar homes sold in the same area (same beds, baths, sq feet, etc). How do I figure out what the ballpark ARV would be if i have nothing substantial to compare it to? I know I could ask a realtor and I am working with one who could provide that info, but I'm curious what information would those comps be based off of?

[Martin Sterling]

Typically, if your goal is to wholesale it or fix and flip it yourself, if you don't have comps in a 0.5 to 1.0 mile radius, the deal isn't worth doing.

A lack of comps will give you immense challenges on the exit of the property no matter how nice you fix it.

If you are buying for cash flow, it may be easier, however, if you are using acquisition capital (hard money) to purchase the property, and plan to refi out of the hard money to a 30 yr fixed, you still may have problems in having the property appraise for what's required to cash out or repay your lender.

An exception to the above is if there are few comps because the area is so desirable that once people own in that area, they never sell. You'll sometimes see that in extremely high end markets or downtown areas going through positive changes like an area marked for Amazon to come into. These areas typically have a very low days on market (DOM)... less than 30 days.

In summary, few comps are a bad sign.