The DFY Blog

Addressing The Myth of Buying With “Equity” | What Is a Good Deal, Really?

Posted by Kevin Clayson Monday, 15 March, 2021

addressing the myth of buying with equity kevin clayson steve earl good deal

Many real estate investors think that a good deal means buying with equity built-in, meaning you have to buy a deal that is worth more than you are paying. But real long-term success in real estate proves that you make equity over time – you don’t have to buy with it baked in.

 

In fact, let’s revamp the concept of what a good deal is, and let’s consider what a purchase-worthy property might be. Now, this may not fit your traditional real estate education, but in our long career, we’ve found that purchase-worthy properties make way more sense than a “good deal”.

 

“It’s the factors beyond the numbers that will dictate whether or not something is a purchase-worthy property.” – Kevin Clayson 

 

In this episode, we break down five criteria by which we determine whether we have a purchase-worthy property on our hands or not. Tune in to find out more!

 

Key Takeaways

  • What people traditionally think is a good deal (01:28)
  • The first criterium is always the market value (07:13)
  • Your decision needs to be based on the market environment (11:15)
  • Something a lot of people don’t consider before buying (14:25)
  • Don’t get carried away with the numbers (18:12)
  • Why is a positive cash flow so important to look for (23:10)
  • Predictability and consistency as cornerstones of success (28:44)

 

Top Quotes

“It’s the factors beyond the numbers that will dictate whether or not something is a purchase-worthy property.” – Kevin Clayson 

“Maybe it’s time to revamp your concept of what a good deal is.” – Kevin Clayson 

“When you talk about the concept of how does it look on paper versus how will a property actually perform, those are two very, very different things.” – Steve Earl

 

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