HOW DO YOU KNOW IT IS GOOD DEAL?!
HOW DO I KNOW IF A PROPERTY DEAL IS GOOD OR NOT? This is a great QUESTION! Most people look for a magic number. The truth is : a “good deal” is one that hits your metrics and aligns with your goal. Deals are made, not found — so set your rules, then make the deal fit them or walk away. Quick check before I prescribe: What’s your primary focus right now — cash flow or capital growth? And what’s your experience level with property investment? Here’s the simple operating system I use with clients: Define your metrics first BTL: target monthly cash flow after ALL costs, minimum ROI, and yield. I like ROI as the headline: annual profit divided by total cash in. Flip: target profit on cost and GDV margin. Example: 20%+ on cost or 15%+ on GDV as a baseline. HMO/other: room rates, occupancy, NOI, ROI. Price is what you pay, value is what you get. Work out true market value from comparable recent solds within the same post code first then extending to 1/4 mile ,1/2 and 1 mile with the same number of beds ,same size and with same or similar conditions etc. Forget the asking price — offer what works for your numbers. Your max offer is the lower of: market value, and the price that still hits your metrics. Stack the five variables that actually move the needle. You usually change just a few numbers: End value or achievable rent Refurb cost and timeline. Finance cost. Number of rentable units/rooms. Purchase price. Everything else should be standardised in your model. Cash flow and ROI test for buy-to-let. Will it rent quickly, and for how much? Use live listings and calls to local agents to sanity check. Include every cost: mortgage, insurance, management, maintenance, voids- ground rent/service charge if a flat (Service chargers in some areas such as in London or Manchester can be deal maker or broker !). If ROI and monthly cash flow don’t meet target even when you push price down, it’s not your deal. Motivation over prettiness . We’re not looking for properties, we’re looking for motivated sellers with problems need to be solved . Condition issues, long time on market, price reductions, fall-throughs — that’s where you can make terms and price work.