No comps for duplex/tri - should I be concerned?

Question

Listening to to Ep. 314 where Andresa says she says seeing 0 comps is either really good (hot market) or really bad (no interest). Thoughts on how to discern the difference? I can find lots of comps on SFH, but I'm looking to house hack in a duplex/tri and see none with my criteria. Looking in New Jersey off NJ Transit.

Thanks!

Max T. · Answer

base your max offer on the cash flow then

Will Reynolds · Answer

Thanks for all the feedback - trying out Redfin and was able to see multiple comps, realtor.com had none in the same area - glitch or are some apps better than others? I'm sure there's a post on that already!

Dion McNeeley · Answer

An issue that can come up from no comps is the appraisal. The appraiser can sometimes make or break a deal. If the asking price and the appraisal are too far apart you may have to come up with more money down which could make the numbers no longer work.

I had an appraisal save me from a bad deal when I was first starting out. The duplex appraised 65k lower than the asking price and I could find what I thought were comps that were close to the asking price.

Later I found out more about comps and realized I was using the wrong ones. Then as I gained some knowledge I found out the cash flow on this property would have been zero. I wouldn't have lost money every month but I wouldn't have had any positive cash flow either.

I am still pretty new to real estate, so I always have an inspection done along with the appraisal.

Good luck.

Tyler Drapeau · Answer

@Will Reynolds Like Max said above I would base your offer on cash flow and your criteria. I would try to either completely replace your monthly housing expense (which is difficult in northern NJ) or cash flow $xxx/month per unit. If you follow that criteria and the place appraises what your buying it for, it may not matter there are not comps. I am currently house hacking in Wharton, NJ and looking for another place to house hack in the next couple months. If you'd like to chat please feel free to DM me.

David Wright · Answer

@ Will Reynolds - Will take it from a hard money broker, RUN, if you can not get comps on ANY property, especially if you need financing.  Now if you do not need financing that is a little different, but I still would not consider a property that does not have comps.

If you need financing and there is a property with no comps, it will be difficult to get that loan approved.

I hope this helps you. I wish you the best.

No comps for duplex/tri - should I be concerned?

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