How much cash flow per unit?

[Jennifer Nguyen]

When analyzing properties, how much money is a good amount to aim for per unit?

[JD Barrera]

Hey Jennifer, as Ben mentioned... a lot of this is going to depend on your personal goals. 

To give you an idea to help you form yours, here is what I do currently based on the location and the types of property I try to invest in:

I look at is the cash-on-cash (CoC) ROI. This is basically (income - all expenses)/(total price point invested). A good way to look at CoC ROI is, its the equivalent of the annual dividend return when purchasing a stock. I shoot for a 7% CoC ROI (or dividend). Then, assuming the home value appreciates with inflation (3%) the total return with be 7% CoC ROI + 3% appreciation = 10%. Any additional appreciation due to market changes will be "icing on the cake".

So I don't really look at a fixed number for CoC ROI. I maybe $10k into a property and have cash flow of $58/month or $40k into a property and have a cash flow of $233 and both situations are ok for me since I'm getting the same return on my money.