Make your money when you buy: How to justify the relativity.

[Levi Todd]

Hello all! I am so pumped to be on this Real Estate journey with all of you. I have been studying the world of REI for probably about a year now. I have aimed to take achievable and actionable steps towards my goal of buying my first property with intention to rent or flip by connecting with local investors, evaluating deals, and of course listening to the BP Podcast/reading books.

With that being said, I am slightly hung up on this idea of "buying it right." Many obviously support the idea of buying below current market rates to hedge against a market correction. As investors, we aim to purchase deals with immediate equity. But with a "good deal"  and appropriate purchase price being relative to the conditions/price of the market comps across the board. How do you decide how much of a discount is enough of a discount?

For example, let's say the going rate of comps within a specific set of Single Family Homes is 350K-$375K. This is within a fairly hot market. If I have found a "good deal/discount property" for 285K-300K that needs 15-20K of improvements.  Is this enough buffer to take the risk and make an investment considering the market adjusts and now said house is right back to market rates? I'm basically confused because "buying it right (price wise)" seems like a relative concept. 

How do you approach/justify/hedge for this question. Hopefully this makes sense (happy to clarify if it does not). All opinions are greatly appreciated. 

-Levi