Expert Bust #8 You lose money when you buy

Sometimes.

That advice is right for lots of people but it is not a universal truth. I buy off market properties and create great deals by helping sellers solve their problems. I buy for cash and then did up the house and refinance out all my capital. The return I get going forward is infinite and this came from his I bought.

Hey Jeremy, I am from Australia originally and own 6 rentals across 3 states so understand how the Australian market works. I do make money when I buy. It is the way I buy specifically that makes the money. I pay cash and close fast with no contingencies and other terms that the sellers like. There are also no realtor fees for the seller. This means when I close a deal I have instant equity.

This doesn’t make what you are saying wrong, only when you put the information forward as a universal truth. Like Robert Kiyosaki says there are 2 sides to every coin and the smart people sit on the edge of the coin and understand both sides.

There is a story behind every house I buy of a seller I helped. If you want to understand more I gave been listing videos talking about it https://homebuyerlouisiana.com/we-buy-houses-new-orleans/

Jeremy you assume incorrectly. I do often add value myself but I also assign a lot of my deals. This means that I contract them and then assign the contract to another investor at a higher price. They close the property and I receive the difference. I sometimes double close meaning I buy the property and sell it to another person on the same day. The value I added was putting the deal together and I made my money when I bought.

I think the issue with this thread is it is getting hung up on trying to debate the “definition” of something that is defined loosely when in reality, at the end of the day, what investors really care about is the practical strategies and the outcome it drives.

Instead of buying at standard $250K market value, investors buy at $150K, spend $20-30K and result in property achieving $250K value even though they only spent $180K on that. And as far as from practical application’s point of view, investors considers this as an example of “make the money when you buy” strategy and as far as they are concerned, it works.

Who cares if people think from a dictionary point of view, that “technically this is not the definition of make the money when you buy”. We are not here to discuss dictionary definition.

Its like someone isholding an Ox-ford dictionary and insists on correcting every single person on a few words that are frequently used loosely in a loose verbal conversation and telling every single person “your English is crap”….. well, nobody really cares.

Jeremy Sheppard wrote:

The whole point is the plan an investor has for the property. If an investor’s focus is on making money when they buy, they may not have a plan in place for the property after they buy it. They may simply be trying to buy a bargain. They think they’ve made money when they bought. But they haven’t. By instead focusing on what happens after the property is bought, you’re more likely to realise a profit. E.g. reno, subdiv, dev, cap growth, yield etc. All of those strategies require a plan prior to buying and an implementation of that plan after buying. In the case of cash-flow, the investor will focus on the income vs expenses and vacancy rate and landlords they’re competing with for tenants. In the case of capital growth, the attention is given to supply and demand. In the case of a reno, the investor estimates costs and new value. In the case of … etc. The focus is not on buying cheaply. The focus is not on making money when you buy. The focus in all these cases is on making money after you buy. It’s that focus I’m talking about. Buying cheaply isn’t a feasible strategy. There’s no such strategy as the discount flip because we lose money when we buy.

In this case, then we are talking about the same thing.

In my example:

Instead of buying at standard $250K market value, investors buy at $150K, spend $20-30K adding value and result in property achieving $250K value even though they only spent $180K on that. And as far as from practical application’s point of view, investors considers this as an example of “make the money when you buy” strategy and as far as they are concerned, it works.

Which part of this strategy gives you the impression that the focus is on “buying cheaply?”. None. The whole strategy is well planned and executed in a very logical manner. You are just focusing on the “buy at $150K instead of $250K” part of the strategy while ignoring the rest.

As far as investors are concerned, this whole strategy starts from “buy at $150k”, and ends at “achieving $250k after 1 month”. The strategy over all is loosely described as a “make the money when you buy” strategy. It is not just the buying part, but the entirety of it, and investor just happens to give it a very loose name and the name happens to be called “make the money when you buy”.

Make the money when you buy is not about “you make money now and that’s the end of it”, but rather, it is about “instead of buying a property at standard market value and wait for 2 years before the property makes money, I execute a well thought after plan to something below market value and add value to it, so it can make money for me after 1 month instead of after 2 years and keep making money for me from that point onwards”. The term “make the money when you buy” just happens to be a name or a label we use to describe this type of strategy. There is no point of getting so hung up on “by dictionary definition, this is the wrong term to use”, and this is starting to become a waste of time debate. Especially considering we are talking about exactly the same thing, we just happen to label it differently.

Hey mate,

as an example I made over $150k the day I bought

1 Government Road, Labrador

earlier this year.

I bought for $560k & was worth around that 700k at time of purchase, once reno finisehd will rent for $1100 & be worth 850k+

So

“If the focus is on making money at the time of purchase, what’s the point of holding then? If the focus is on holding then, the purchase price will become irrelevant within a few years of decent growth.”

-Point of holding is cashflow & not paying taxes

-in relation to the purchase price isn’t important then your criteria properly isn’t looking at ROI/Yeild.

disagree with almost everything you said & most properties I have go against your above philosphy.