Millionaire RE Investor - Discount you Require
After reading the Millionaire Real Estate Investor by Gary Keller, the one concept which I had not previously considered is "the discount you require" as one of the key factors in your buying criteria.
I would appreciate other opinions on this concept of how to come up with a viable strategy applying the discount rate you require when making offers. I'm not sure how realistic it is to say you expect a 20% discount. However, in my mind, if you could achieve a 20% discount on every buy, it would almost be guaranteed success.
My current approach to buying multi-families is that I run my numbers and once I am satisfied with the ROI/cash on cash metrics and that becomes my purchase price target. Should I be taking that calculation and reducing it by a discount rate??
Most Popular Reply
I don't require any discount. The numbers on multi family speak for themselves. I look at how much it will be worth when the project is completed.
In all reality, I have probably overpaid on some. That does not matter though. Some of the largest returns have been on zero cap purchases.