How much money is the max investors willing to pay for an investment property for 10% ROI. For example, I have a home I wish to sell for $299,000 and Cash-On-Cash is 10% of cash Investment, will I find buyer easilly?
@Morris Reichman Personally, I think that a cash on cash ROI of 10% is good. Not all investors will think that. It all depends on your perspective and what you are used to. For example, investors that are used to getting 20% cash on cash ROI in certain parts of the country will think this is a horrible deal, but those investing in the stock market(~7% historical ROI) or getting lower returns in other parts of the country will think it is a good deal. Where is the property located? What are investors getting for cash on cash ROI in that area? Did you take into account accurate numbers for cap ex, vacancies, repairs, and property management when you came up with the 10%ROI? Hope that helps!
Thanks Felipe, I'm talking about southern NJ. 10% ROI is beautiful for this area, but compared to the Midwest where you can easily get 20% your right. The question is will investors in this area be satisfied with the best return they can closest to home.
I think the money is made on single-families when the buyer gets emotionally attached and sees their stuff and themselves living in it. Financial metrics maybe not so much with SFH. Hard to guess COC for somebody. What if they buy with very little money down? That persons COC will be very different than someone who paid the full amount out of pocket. Stick with rent rates and NOI, maybe. Why are you selling @Morris Reichman ?
First Starting Out post I've seen asking about selling!
Thanks Steve, so you are saying that many people have the need to feel connected to the house they are buying, and therefore they would forgo investing in some far out place despite higher returns on their money in those places.
If so, what do you think about this, would a potential investor be attracted to a home due to its appearance aside from the ROI?
Also I'm not looking to sell, actually I'm looking to buy, was only trying to figure out the potential of a certain home.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!