Do you pay attention to this deal metric?

Do you pay attention to this deal metric?

Developer · San Diego, CA · Member since 2016 · 37 posts · 26 votes

I've been playing around with ideas to further drill down on my investment criteria and came up with an idea.  In a deal, you would of course want your Return on Assets to be a higher figure than your WACC.  Does anyone out there target a specific spread between the two in order to come to a go/no go decision?

Cheers,

Daniel

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  • Andrew SyriosPro Member
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    Residential Real Estate Investor · Kansas City, MO · Member since 2014 · 10k+ posts · 5k+ votes
    9y

    No, but you are sort of looking at that by measuring cash on cash or cash on cash return. That being said, those are indirect measurements (basically being positive, they say you're making more money than your cost of capital but don't help much with the "by how much?" question). I think adding such a metric would make sense.

  • Developer · San Diego, CA · Member since 2016 · 37 posts · 26 votes
    9y

    That makes sense.  Thanks for the input!

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