Return on initial equity vs. cash flow

[Kenneth LaVoie]

Hi All
I know most of the accepted metrics, like the 50% rule, $100 per door per month, 2% rule, etc. I am seeking both single family homes in decent areas at a discount, with appreciation potential (i.e. decent middle class neighborhoods, blue collar, not white) as well as multi units. considering commerical (above 4 units) but leaning twoard 2-4 with favor toward tenants paying own heat (not common here in maine) -

I am having some trouble finding true $100 per door cash flow. What I do is use all the KNOWN expenses for a property, but use my own 8% for mgmt. and another 8% for maint. (15% for lower income multis above 4 units) and another 8% for vacany. This usually results in about a 62-72% expense ratio (vs. the 50%) for multis and about 42% with SFRs.

Now! Lets say I decide to buy a SFR or Multi, it only cash flows $20 per door per month. Can I look at the expected Return on initial equity to see if it's still a decent buy? For clarity, I figure conservatively for SFRs -- 2% annual increase in income, 3% for expenses and 1% for appreciation. but many of the deals I have turned away are showing a 15% COC return (return on my spreadsheet being paydown, tax benefit, appreciation and cash flow) / initial dp plus closing plus repairs (if i don't do purch. plus improvement loan).

I want GREAT deals but I also don't want to do tons of hard work and turn down a bunch of REALLY GOOD deals. Any thoughts would be great!!

I have found a few buildings that are really cheap, but I don't feel comfortable yet doing tons of rehab. we're talking 2 unit, low income neighborhood, 37,500 with owner financing, out of state owners -- but it needs work! And frankly I am STRONGLY attracted to tenants and neighborhoods that are more decent, generate fewer problems, etc.