Hope I wasn't understood to the contrary, it's an option if there are limited comps, but the appraiser should adjust for an REO due to type of sale and perhaps marketing time allowed.

We tend to try to manage our leases around this and adjust our rents to fill leases during this period.There are some seasonal rentals in winter but not nearly as much as normal.Summer is the worst for us, as economic activity is dead slow due to snowbirds being gone, and this is the period of our worst quality tenants and least activity in renting.

Of course the specific amounts/terms can be adjusted accordingly.

Of course, as the price acquisition price goes way up or way down, that % can be or needs to be adjusted.

Take a house with an ARV of 200,000 that needs 30,000 in repairs (200k * .7 = 140,000 - 30,000 = 110k).You can adjust the %'s if you have a lot of cash, but you really need a discount.

Its always possible to "adjust" your estimates and make a bad deal look good.

As an insurance adjuster I know two of the states Rich mentioned (Texas and Florida) along with Louisiana account for 70% of the wind/tornado/hurricane damage in the US and Texas hail can easily punch through plywood roof sheathing.

the appraisor's excuse for using comps from a completely different area was that most of the houses in our development are traditional while ours is modern so it would not be comparable. apparently the fact that buildable lots in our development sell for $300k and lots in the comparable development sell for under $100K required only a minor $25K adjustment!

If not, I adjust or walk.

One set is happy with better than what they are getting and the other set knows the market for cost of money and adjusts accordingly.As a professional investor you need both...ideally you have enough private money to do all of your deals though.