Looking for a great deal?

“Hey, Donny! Do you have any great deals on the go?”

In all honesty, I get asked this question nearly daily. The answer is always “yes” because a great deal can be anything, really. What does a great deal look like to you?

Keeping this strictly from a real estate investor’s perspective: normally when someone is asking me about a “great deal” they mean something that is priced for sale below market value. The market they’re asking about is the market they live in. Basically, the question can be reworded to: “whose misfortune can I take advantage of?”

I get it, most times the question isn’t asked with any malice. My client may only have had 4 seconds of air to fill and that’s what came out. No judgment here.

The truth is it isn’t up to us to decide why someone is selling low. It’s not taking advantage of someone else if they’re also agreeable to selling at a price that is below market value. What even is “market value” for that property, anyways? Nobody can ever say with 100% certainty.

I digress.

Let’s change the way we see a “deal”, shall we? I often talk about how real estate makes you money in 3 ways. Appreciation - or buying low, selling high - is one of those ways. The other ways shouldn’t be ignored and can contribute a lot towards what defines a “great deal”. 

Trying to buy something at the bottom, or the best time, is really an exercise is trying to time the market. Nobody I know (myself included) has ever been intentionally successful in doing that.

Time IN the market is far more important than timing the market. Waiting to buy the right place in a market that continues to appreciate (hello, almost all of Canada) only delays your acquisition. If you could have bought at market value 3 years ago for $500,000 and instead waiting for a crash - kind of like the one we just went through in 2022 - and that home appreciated to, say $575,000 before “crashing” to $525,000, you did not come out ahead.

If you were successful in buying 3 years ago, you would have had the opportunity to pay down a lot of your mortgage and you may have even started to see some good positive cash flow now in year 3.

So is a great deal really just about buying low at a specific time? I don’t think so. The great deal is the one you make when you can, and is aligned with your business goals. 

In my experience, waiting for a great deal has cost so much more in missed opportunities than anything else. Have you witnessed the same? Probably. The question is, are you going to choose to use these examples to your advantage? I sure hope so.