Because terms matter more than price in a real estate transaction, and I'll show you why.
Consider for a moment that terms are what determine whether a property will cash flow or not. As a real estate investor (as opposed to a mere speculator) cash flow is of utmost importance.
If a property cash flows without fail does it really matter how long it takes to pay the property off? For that matter, if I have guaranteed cash flow, does it really matter if the property ever pays off?
This is why I might be willing, for example, to pay a million dollars for just about any property even sight unseen so long as I can set the terms.
You might laugh thinking "what if I sell him a run down mobile home on its own tiny lot for a million dollars!" Au contrare! What if my terms are: "I'll pay you that million dollars - one dollar a day for a million days. I'll put the property in a trust so that the trust continues paying long after I'm gone."
Now I understand of course that I'm giving a somewhat extreme example here, but I'm trying to drive home a point.
Do you think I could make money, even on a run down mobile home on its own lot if I were paying a grand total of $365 a year? Sure I could! Even if I rented it as is for $300 a month that property would cash flow like crazy. My cash on cash return on investment would be through the roof from day one!
Now...does that mean I could or would run out and make this offer to someone? No, of course not. But there are endless offers that I could make to a seller that is stuck on "getting their price" which still get me my objective of a cash flowing property.
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So what's your takeaway?
Don't ever let price be the sticking point! Price is probably the least most important factor in a real estate transaction!
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