By The Numbers by Mik Cohen

You're interested in House A.
House B, within 1 mile of House A, is a VERY good comparable = House A's structural AND land square footage.

House A is owner occupied and not distressed, which, IS, very good for the economy AND a sign of things to come.

House B is vacant and bank owned (REO).

House B is priced 20K less than House A.
......................You want House A

Here's how to buy House A at a House B price:

1) Check county records to compare assessed values of House A and of House B (It DOES make a difference - we look at historical values AND location, overall). A sales history will, also, be VERY helpful.

2) Check county records (recorded) to see how much debt liens against House A, so you can determine if you can offer, to purchase, House A at House B's price, or less ; )
If House A's debt/liens = or exceeds the value of House A, I don't recommend you proceed, generally speaking.

Why ?
Because the seller would have to have a reason to bring $$ to the closing table.

An exception: If House A has a motivated seller AND they're willing to "rent/lease to own" over a period of time, at a monthly rate that allows you to capture any/all "perceived" equity - then that might be a deal.

3)  Neighborhood SOLDs over the, previous, 45 days:
More rural = less comparables, overall.
Closer in to the city = more comparables.

Comps (comparables) are the best gauge to values in any area/neighborhood.
The closer the comp (To House A), the more realistic the evaluation - and assume other buyers are looking at the, same, data you're finding, so urgency might come into play in a Seller's Market.

If House A appears to have minimal debt to value (MDV), then an offer closer to, or less than, House Bs price, IS an option.

4) Patience - 
We understand that some properties tap into your needs and ignite your wants.
In this case, use your LONG TERM GOALS to see if House A is a fit for you.

*** If your plan is to hang out, in House A, for more than 5 years, then your acquisition price changes from a business perspective to a personal perspective AND price is determined by your wants, as much as your needs.

Patience is key in ensuring you're making the right decision.

At the end of, ANY, given day - you make $$ when you buy, but don't get paid until you sell.

Like any investment, you're tasked with the research to determine if real estate is your right investment, based on the period of time in which you're willing to tie up your $$ and the ROI you're expecting.

Real estate is an amazing investment that can earn the, savvy, investor HUGE returns on their $$ (ROI).
Buy right and sell right....er !
In the end, it's all about the numbers.

Good luck !
Mik