Don’t be “that guy.” Telling a real estate professional that you’re looking for a “really great deal” says a lot about you and none of it good.
First of all, duh. Who’s looking for a really bad deal? “What I’m really looking to do is buy something above market with negative cash flows and then sell it for a loss,” said no one ever. The purpose of investing in real estate is to make money. You wouldn’t be doing it otherwise. Wanting a positive return on your investment goes without saying.
Second, it shows a fundamental lack of respect for a broker’s expertise and time. “Really great deals” are rare. Their scarcity is what makes them valuable. You’re not going to find an investment with such characteristics on the open market. Competing offers would drive up the price until it became a “market deal.” Truly “great deals” trade off-market and, as such, require extensive research which consumes time and energy. Real estate professionals are typically paid commissions when a deal closes. Anyone that thinks that a broker looking for a needle in a haystack is a productive use of their time reveals how little they respect it.
Third, if I find a “really great deal” why would I tell you about it? I’d buy it myself (or find the means to). If I put in the time and effort to find an off-market investment opportunity, put the deal together, etc. I’m going to be the one that benefits as a result. If one expresses their willingness to work with a broker only on the condition that they bring them a “really great deal” they’re revealing an underlying narcissism that makes them exactly the type of client you don’t want to work with.
*** The previous 2 examples do not apply if a buyer is willing to pay a broker a retainer for their services with clearly stated deliverables ***
Finally, “really great” is a subjective term and unless someone can clearly articulate their investment parameters they’re not a real investor and will most likely waste your time. A “really great deal” for some may not be for others. A good deal is a market deal. Therefore, by definition, a great deal would be one that produces above-market returns. If someone says that they’re looking for a “really great deal” without saying where, what return that amounts to, etc. they’re not really looking for anything. How can they confirm a deal is “really great” if they don’t have parameters against which to measure it?
True real estate investors know that “really great deals” are the result of hard work, both in finding the opportunity and effective management during the holding period. The investigative efforts to identify an off-market opportunity can be time intensive and resource draining. In real estate (particularly brokerage), time is money and to expect a real estate professional to perform these services on a contingency basis is unreasonable and denotes a lack of mutual respect.
To expect a “really great deal” to fall in your lap is like expecting to win the lottery. The most successful real estate investors haven’t gotten lucky over and over again; they’ve used sound investment principles to guide their decisions on when to buy and when to sell. They understand that adding value is the true way to turn a good deal into a great deal. This can take the form of investing in capital improvements, increasing rents, lowering operating expenses, etc. Real investors run cost benefit analyses to determine the most effective and efficient actions that can be taken to increase a property’s returns and maximize value.
In conclusion, don’t be “that guy.” Determine your investment return parameters and goals and be able to clearly articulate them. Experienced real estate professionals, particularly CCIMs, have the expertise and resources to show you how to turn a market deal into a great deal through creative deal structuring, effective property/asset management, capital improvements, etc.