Do You "Profit When You Buy"
If you have been in this business for any length of time you have heard the statement... "You Profit When You Buy" And, if you are successful, you have been practicing this investors Mantra since day one! 3fb7zka65s
I have faithfully followed this "best practice" starting with the very first property I purchased.When the real estate market was running rampant in 2004 and 2005 many investors would buy a property and not have any idea whether there was a profit in the deal. But, the market being what it was, always seemed to provide them with a profit because each month property values continued to climb and climb. And then of course it all stopped, and those investors who did not know about this simple concept of "You Profit When You Buy" and there were many… got slaughtered.
What does "profit when you buy" really mean? It means that you make your purchases at prices low enough that a profit is possible regardless of what the market is doing.
Consider how I advise my clients in The Club… in our current market we cannot be sure where prices for homeowner homes will be tomorrow, next week or next year. They certainly appear to be continuing their downward slide.
But when you approach a purchase in today's market, you know that you have to account for these anticipated value declines. You know that you have to make your offers at prices that will allow a profit based on your actions… and not based on the actions of the market… which if I am correct, neither you nor I can predict or control.
One other important point to consider regarding "you profit when you buy".
I always explain it this way…
"Profiting when you buy"… means…
"Purchasing a deal at a price that will allow you to extract the equity out of that deal as cash based solely on the plan that you develop and then based on your knowledge, skills and abilities you execute that plan to profitable completion."
Bottom line… don't count on anything, not the market, your agent, uncle, friends… nothing… to give you the profits in your deals. This is your primary job… don't blow it!
To Your Success...Pete
If you found this post to be of value, I would be honored if you passed it on to others who may benefit.
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Peter R, Giardini is the founder of The Club, Real Estate Mastermind a National Real Estate Investor Coaching program whose philosophy is that real estate investing coaching/ mentoring can only be provided by experenced "local" coaches in a one-on-one environment. To find out more about The Club visit or send an email to .
You can listen in and participate in Pete's Real Estate Investors' Mastermind radio show every Thursday night at 11:00PM on BlogTalkRadio... . All rights reserved 2009.
Comments (2)
Christopher, One thing I did not add to this post was that the number one job of an investor is to extract as cash as much of the equity from a deal as they can. With that being said... the more equity the greater the potential for more cash as profit. And the only way to put that potential in place is to buy low enough that your profit is in place at the time of purchase. Hence... the You Profit When You Buy. Good Luck... and thanx for reading and commenting on the post.
Peter Giardini, almost 15 years ago
This concept was difficult for me to grasp at first. I didn't understand what it meant to make money when you BUY. I now see that you make money when you buy, but don't realize it until you SELL. Thanks Peter!
Christopher W., almost 15 years ago