Is the term “buy a deal” a real thing?

Question

The guys on the podcast always say “buy a deal”, is this a term that is used in real estate?

I have never heard this term outside of Bigger Pockets. It drives me insane, because how exactly does someone purchase a deal?

The definition for of “deal” is: an agreement or an arrangement, especially in business.

Ken M. · Answer

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What they are trying to say is, buy in such a way you make money on it.I've already bought two properties this year in the Phoenix AZ & Austin TX areas at about 85% of what they would sell for on the MLS. That amounts to about $60,000 savings on each property. I have two or three properties on my desk right now that I'm trying to decide if they would amount to a "deal". I simply offer what makes sense to me in this market. I explain to the sellers why I make the offer the way I do and some people accept it. I've tried teaching real estate agents how to make my offers and they lost every one. I think they are scared of "insulting" the seller. I've had to be the one presenting the offer, because there is almost always a counter offer and a hidden need from the seller that has to be uncovered. Only people who aren't constrained to buying from the MLS and using bank financing can make this work. If you "have" to buy off the MLS or use a Bank, I can't offer how you "make a deal" in that scenario.

If you have a decent income, that's all you need. Banks are for people who can't manage money. We just set up a payment program, just like a bank would. Some use their 401(k) or pension.

What is funny, to me, is that after teaching people to do this, they prefer to just pay me to buy them a deal that makes sense to them. It's still a "deal" but  it seems it's more productive to them. I'm just having fun buying properties, for a fee.

Izaiah Barba · Answer

From my experience, it’s more of a mindset than a literal phrase. When someone says “I bought a deal,” they’re saying they bought a house at a price that allows for profit whether that’s a fix and flip, a BRRRR, or a creative finance play. We use it all the time because it’s quicker than explaining the numbers behind each buy.

Arman Ahmed · Answer

@James Johnson

Hey James, you’re right—the term “buy a deal” isn’t really standard outside of BiggerPockets lingo. What it usually means is someone has sourced a property (often off-market or under contract) and is selling the right to purchase it to another investor—basically passing along the opportunity rather than the property itself. It’s more common in wholesaling and networking circles.

Gregory Schwartz · Answer

Deal (noun): In common usage, a property offered for sale that meets the financial and strategic criteria defined within an investor’s buy box.Yes, all my clients, 'want to buy a good deal." Even those not on BP

Nicholas L. · Answer

@James Johnson

it's a good question - and yes, the term is used a lot, although i typically just say "property."  it's typically used to mean an arrangement where there is some kind of value add opportunity or advantageous arrangement for the buyer.

this could be a property that's distressed in some way, such as a property needing a major rehab; or a property with some other deficiency, such as below market rents, or a bunch of vacant units, or a property that is being improperly managed, or in need of safety or amenity upgrades, or some combination of all of those.

a lot of us buy off market - so for SFH and small MFH these are properties that aren't listed on the MLS and where there might not be agents involved.  my last several deals have been off market although i still look on market.

hope this helps