How To Tell If A Deal Is A Good Deal?

What makes a deal a good deal for you? What you want from your next purchase is unique to you. Someone just starting to invest will want different benefits from a property than someone who has reached their financial goals.

A buyer with little income will have a different need than a high-income buyer. Both may have the same goal, (enough income from their investments to be financially independent), but what they buy and how they finance it today will be different.

Although the market for property and financing may influence when you buy, you should decide what and how to buy to get the benefits important to you today. Which if these is the most important in the next house that you acquire?

1.      A property that you want to own until it at least doubles in price

2.      Positive cash flow

3.      A below market price

4.      Advantageous financing

Although you might buy a property with all four of these, you don’t need all four every time that you buy. An advantage of buying multiple properties (a portfolio of houses) instead of buying just one larger property is that you can focus on getting a specific benefit with each purchase.

You can buy one house below the market, one with cash flow, one with great financing and one with better-than-average appreciation potential. As you buy houses with different benefits, you can continue to balance the growth potential and cash flow that your houses produce.

Another benefit of buying several houses instead of one larger building is that you get to negotiate many times, not just once. You will see more opportunities and get to negotiate with sellers with different needs and motivations.  

Your negotiating skills will improve with each successive purchase. Negotiation is a skill set that can only improve with study and practice. When buying you must have a plan and then be able to react to the other party’s response. To improve your skills study my course Negotiating Secrets of a Professional Buyer.