Why Structure Matters More Than Price in Real Estate Investing

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:

• High rehab costs
• Long holding timelines
• Limited buyer demand
• Tighter margins than expected

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:

• How much cash is required upfront
• Who controls financing
• Monthly payment obligations
• Exit strategies
• Risk exposure

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:

• Low-interest underlying loans
• Seller financing with flexible terms
• Wraparound mortgages that create payment spreads
• Private money used short term and paid off at resale

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:

• Hold as a rental
• Resell with owner financing
• Sell the note
• Refinance later
• Exit quickly if needed

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:

• Speed
• Certainty
• Relief from payments
• Avoiding repairs
• Avoiding foreclosure
• Simplicity

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:

• Deal One: Deeply discounted but required heavy rehab, months of holding, and a narrow buyer pool.
• Deal Two: Near retail price but acquired subject to a low-interest mortgage, required minimal cash, and was resold with a wrap that produced monthly cash flow and a strong down payment.

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:

• Fixed long-term payments
• Clear documentation
• Multiple exit strategies
• Limited cash exposure
• Predictable monthly obligations

When the market shifts, structured deals survive. Speculative deals struggle.

How Investors Should Evaluate Opportunities

Instead of asking: Is this cheap?

Ask:

• Does this deal cash flow?
• How much cash is required?
• What are my exits?
• What happens if the market slows?
• How long am I exposed?

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.