Introduction
Many new investors believe the best deals are the cheapest ones.
They chase discounts, obsess over purchase price, and wait endlessly for perfect numbers. Experienced investors see deals differently. They understand that price is only one variable. Structure is what determines cash flow, risk, and long-term profitability.
At Mac Does REI, we routinely pass on low-priced deals while pursuing higher-priced properties with better terms. This post explains why structure matters more than price and how focusing on terms can unlock opportunities most investors overlook.
The Difference Between Cheap and Profitable
A cheap property is not automatically a good investment.
Low purchase prices often come with:
A well-structured deal, even at a higher price, can outperform a discounted purchase if it produces consistent cash flow and flexible exits.
What Deal Structure Actually Means
Deal structure refers to how the transaction is put together, not just what you pay.
Structure determines:
Two investors can buy the same house at the same price and end up with completely different results based on how the deal is structured.
How Structure Creates Cash Flow
Cash flow is created by spreads, not discounts.
Examples include:
We expand on this concept in related blogs such as How We Closed on a Home with Zero Down and What Happens to the Mortgage in a Subject-To Purchase.
Terms Give You Options
Terms create flexibility.
A deal with favorable terms allows an investor to:
A deal that only works if the market improves is fragile. Experienced investors prefer optionality over speculation.
Why Sellers Care More About Solutions Than Price
Many sellers are not motivated by top dollar.
They are motivated by:
When you solve a seller’s problem, price becomes secondary. This is why creative strategies such as seller financing and subject-to purchases consistently outperform traditional offers.
Real World Example
We recently reviewed two opportunities:
The second deal produced income immediately and carried significantly less risk.
Risk Is Reduced Through Structure
Structure is also how investors protect downside.
Strong structure includes:
When the market shifts, structured deals survive. Speculative deals struggle.
How Investors Should Evaluate Opportunities
Instead of asking: Is this cheap?
Ask:
These questions lead to better decisions.
Final Thoughts
Price matters, but structure determines success.
Investors who focus only on discounts limit themselves. Investors who understand structure can build portfolios with less capital, less stress, and more consistency.
At Mac Does REI, we believe great deals are built, not found.
If you are an investor looking to learn how to structure deals instead of chasing price alone, connect with Mac Does REI. We are always open to reviewing opportunities and partnering on smart, well-structured investments.