Question: How do you find a great deal in this market?
Answer: This is a very common question that I am asked all the time. And my answer may surprise you - You may not need to find a great deal.
Whether a deal is "good" or "great" truly depends on why you're investing in real estate to begin with, versus the deal itself. In order to evaluate if buying a property is a good investment for you, you have to identify your goal. Is your goal:
- Cash flow
- Equity
- Write-offs
- Retirement
- Vacation Home
...I could go on and on, because there are plenty of reasons to buy real estate. Keep your goal in mind when searching for your "great deal".
Consider our investor from last week: He wanted to buy a home now and keep it for 17 years so that he would have enough through equity and appreciation to sell the home to pay for his kid's higher education. He needs to find a "great deal" where the positive cash flow could be minimal or break even. His renters would pay the mortgage, and the home would appreciate. For him, this is the bottom line of his great deal.
But consider another scenario. For someone who wants good, positive cash flow today - why would he buy the same property as the first investor above? For him, that is not a great deal. That deal provides no cash flow. This investor needs to look at small, multi family homes that provide rental income.
Bottom line for real estate investing - you will hear me say this over and over. Know what it is that you want to do, and look at all of the ways to make it happen.
Stop looking for the "great deal". Unless you know your goals, you're not going to find it.
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