When is it Acceptable to Purchase a Property For Market Price?

[Qusay F.]

Hello all,

About 6 months ago I purchased my first property, a duplex on the MLS at below asking price (and below market based on comps) in a high-demand, albeit up-and-coming neighborhood of Buffalo, NY. I've since rehabbed it and just about ready to list it for rent. The rehab has been exhausting, but a great learning experience. I work a full-time job so I want to find something more "turn-key" for my next investment purchase. I made an offer on a similar home, but in a higher-class area. Again, I found the property on the MLS, made an offer, had an inspection, etc. My realtor thinks I got a great deal, even though I went against my ideals this time and offered above asking price and I feel I may have made an emotional decision with the offer. The owner declined negotiating the inspection addendum and I have an out, but I think there is good long-term opportunity here according to my calcs - good cash flow + appreciation + stable rental market.

To sum it up, my question is: in your opinion(s), when is it acceptable to purchase an investment property in a hot rental market at asking (or above). what would you compromise on with initial up-front cost (i.e. no rehab, appreciation prospects, etc.)?

Thanks