Monthly Cash Flow vs. COC ROI

[Marvin Ghafoori]

Hello All, Im brand new to investing and looking for my first rental. I live in Orange County, Ca and analyzing a triplex listed at $999,999 with 30% down. I've watched all the the BP vids and following the 50%, Cash Flow per rental, and COC ROI rules. After I enter all the numbers I'll have a monthly cashflow of approximately $700 but a COC ROI between 2%-3%. Listening to the vids this may not be a good investment because of the percent Im making on the money down. Would you all agree or does the monthly cash flow supersede the COC ROI. I appreciate the knowledge and hello to any investors in Fullerton. Thanks

[Brett Radi]

Like Marc said, cashflow is a personal thing.  I personally wouldnt spend $300k to make $700 a month.  Also, what happens when one of those units isnt rented for a month or you have to spend a month rehabbing a unit after someone leaves because they had a cat who peed everywhere even though you didnt allow pets?  I live in a different market and do commercial, but I will give you a real life example of a deal I am doing now with similar numbers as you.

$900k purchase, 3 tenants, 25% down, $3,250 monthly cashflow. 

Now, if you are purchasing the triplex and living in one while lowering your personal housing cost or having a bit of cashflow on top of it, by all means do so.  The important thing is to start investing.