I’m Learning That Not Every “Good Deal” Is Actually a Good Deal

[Clement Oigoga Adams]

I’m Starting to See Why Experienced Investors Pass on “Good” Deals

One thing I’m learning about acquisitions is that a good deal on paper doesn’t automatically make it a good deal for every investor.

When you’re new, it’s easy to look at a property and think:

“Looks like there’s equity here. Why wouldn’t someone buy it?”

But experienced acquisition professionals seem to approach opportunities differently.

They already know what they’re looking for.

They have a buy box.

They understand the markets they want to be in, the types of properties that fit their strategy, their acceptable risk, and most importantly, how they expect to exit the deal.

That means they’re not necessarily trying to chase every opportunity that comes across their desk.

They’re asking questions like:

- Does this property fit our buy box?

- Is the projected ARV realistic?

- What risks could we be missing?

- Does the deal still work if repairs cost more than expected?

- Who is the likely end buyer?

- What is our exit strategy?

- Does this opportunity fit what we already know how to execute well?

I think that discipline is one of the biggest differences between simply finding properties and actually becoming good at acquisitions.

A beginner can get excited because a deal might work.

An experienced investor is often more interested in understanding why it works, what could go wrong, and whether it fits their strategy.

That’s something I’m trying to learn more about as I continue studying acquisitions.

For the acquisition managers and wholesalers here:

What is one criterion you absolutely refuse to compromise on when evaluating a deal?