Updated: Jul 14
When I see posts in property groups and
people say they have a deal and share the numbers, sometimes these deals don’t allow for certain things or people commenting say it isn’t a deal because it doesn’t meet certain parameters.
In my opinion, a deal is very unique to you, now as discussed in episode 63 I break down a deal by starting with the end in mind and chunking the deal backwards by deducting all costs to get you to and offer a price that will get you all your money out.
Are these sorts of deals about going back to your belief if there are, as Henry Ford said if you believe it or not you are probably right. I am here to tell you there are deals like that out there, but you have to be disciplined in your approach to finding deals, most will come through estate agents and auctions but the best ones will come direct from the vendor.
Now of course structuring a deal like this is probably the best way and what most education platforms/training companies will show you. But for me, Money put into a deal, Cashflow, Return on Capital Employed, Yield or Return on Investment are all unique to each investor and you should be working out your parameters so you know what works for you.
If you are starting out and working out your position use my E.M.P.T.Y. model, there is a full explanation on Episode 4.
Money (yours or others)
Then know your property ABCs, again I have a full explanation of these in episode 32.
Buy below market value
Change the use.
"Clarity creates focus"
Get clarity on the above and then you can start pushing forward finding the right deals for you because unless you have an endless pot of money to put down for deposits and refurbs, you need to work smart with the initial capital input which is why trainers teach the first model.
In conclusion, if you are happy to leave money in a deal and it is the right ROI, cash flow etc for you that is ok, as long as you are doing your due diligence on the deals whether they have been found by you or a deal packager.
Remember this is your journey and you are in control. Be disciplined, stick to the parameters and plan.
All the best Dan