Why So Obsessed With Finding a "Good Deal"?

[Tom Scott]

I've been studying everything I can get my hands on about buying and owning multifamily properties. The one thing I keep seeing is that people will only buy if it's a "good deal". Now, I of course understand that that term is subjective and greatly depends on the buyers goals and criteria but for the purpose of this post I will describe it as I have most often seen/heard a "good deal" described. A "good deal" is one in which you can purchase a property below market for some reason, or purchase and then rehab or better manage it, which will in turn allow raising of rents and therefore increase the market value of the property and equity. For lack of a better term I would say that most of these properties would be distressed. 

Hearing this over and over, I started to question the validity of the practice of only buying a "good deal". It would seem to me that buying a cash flowing property, in good condition at market value, assuming 25% down and the rest financed in your preferred way, while obviously not profitable as the deeply discounted property, would still be a good choice as long as the cash flow was adequate to your needs/criteria (maybe $100-$200 a door). The reason I say this is even though you cannot gain equity immediately through rehab and raising rents, you can still gain it slowly due to the fact that your renters are paying your mortgage for you. 

Just to be clear, I am not saying that buying distressed is bad. In fact just the opposite, it's great. I am however saying that turning away deals because they aren't distressed may be a mistake, or at least that's my line of reasoning at this time.

Also, it would seem to reason that, in the case of poor condition and mismanagement, a lot of work needs to be put in on the front end to get the property up to snuff and cash flowing to its potential. This might be a pretty tall order for investors like myself whom currently hold down a day job and invest on the side. Less headaches may just be a welcome thing for those of us struggling to manage a job and a portfolio. 

Tell me what you think, am I right? Am I wrong? Am I somewhere in between? I'd love to hear some feed back.