{"id":121204,"date":"2020-01-09T05:00:45","date_gmt":"2020-01-09T12:00:45","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=121204"},"modified":"2021-03-16T14:57:54","modified_gmt":"2021-03-16T20:57:54","slug":"definition-good-deal-real-estate","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/definition-good-deal-real-estate","title":{"rendered":"What’s a “Good” Deal in Real Estate? 5 Criteria to Consider"},"content":{"rendered":"

What\u2019s the biggest problem for investors these days? Ask 1,000, and most will tell you that their biggest challenge is finding good deals. This makes sense intuitively. It\u2019s 2020, 10 years into a bull market for real estate, and it seems<\/em> like good deals are harder than ever to come by.<\/p>\n

But dive a little deeper, and most of these investors who complain about not being able to find good deals can\u2019t even describe what a good deal means. The second biggest problem for investors on BiggerPockets is that they are looking for general help \u201cgetting started.\u201d<\/p>\n

I believe that for most new investors and investors with just a property or two that these problems are linked. I don\u2019t believe that it\u2019s necessarily as difficult as many might make out to find great deals. Instead, I believe that many investors are unable to articulate clearly what a good deal IS.<\/em><\/p>\n

They don\u2019t have the faintest clue about what they are looking for or are using the term \u201cgood deal\u201d to express their desire to purchase a property that exists only in their personal fantasyland. I\u2019d love to buy that $100,000 quadplex in perfect condition renting for $8,000 in Denver, too.<\/p>\n

\"\"<\/a><\/p>\n

Before diving into real estate investing, make sure you understand how to compare markets and properties. Whether you\u2019re trying to decide between investing in Boise or Sacramento\u2014or you\u2019re just comparing two similar homes\u2014this guide will walk you through all the numbers you need to know. From calculating cash-on-cash return to running a comparative market analysis, the experts at BiggerPockets demonstrate the steps you need to follow and the statistics you must know with\u00a0The Beginner\u2019s Guide to Real Estate Market Analysis<\/a>.<\/em><\/p>\n

This article will show you how to define, in crystal clear terms, exactly what a \u201cgood\u201d deal is in a literal sense, so that you are no longer confused. But more than that, it will help you define what a realistic opportunity and deal is for you<\/em>. Because a great deal for a flipper<\/a> is not a great deal for me as a passive investor. It all depends.<\/p>\n

A Simple Overview of a Good Deal<\/h2>\n

A good deal is a deal that meets your criteria and that is purchased at a discount relative to other properties with similar characteristics in your local market. That\u2019s it.<\/p>\n

This would be a short and boring read, however, if we ended there. I suspect that the challenge for most investors is in defining their criteria, and then in setting up a system for snagging a real deal that meets their criteria at a price lower than the average price of other properties with similar characteristics in their local markets.<\/p>\n

To keep things simple, we will stick to five criteria to get started. These are:<\/p>\n