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Updated over 6 years ago on . Most recent reply

Account Closed
  • Valley View, TX
0
Votes |
9
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Will paying cash for a deal punish us on Cash on Cash returns?

Account Closed
  • Valley View, TX
Posted

Is it harder to get a ten percent or more Cash on Cash return when doing cash deals?  Seems like the only way we can up our Cash on Cash is to calculate the purchase with a much lower down payment... but we want to sink our own cash into the deal.  I am struggling to see if it is a bad deal or if we need to accept lower Cash on Cash returns when we invest all-cash deals... Thanks!

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Joe Villeneuve
#5 All Forums Contributor
  • Plymouth, MI
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Joe Villeneuve
#5 All Forums Contributor
  • Plymouth, MI
Replied

So, w hat you're really asking is this:

1 - Is it better to pay for the entire cost of the property by yourself, or let the tenant(s) pay for the vast majority of the cost for you?

2 - Is it better to turn a profit within your first couple of years, or can you wait for year 20 to see any profits?

3 - Is it better to have 10 properties, a;; cash flowing now, all seeing a profit before year 2 is over, or buy one property now, mot see a profit for a long, LONG time, and not be able to buy the next property for at least another 10-15 years?

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