$100 per door formula - Does it make sense to you?
Hi guys,
I need clarification on a phrase I hear often times around investing in rental properties.
Often times I hear the whole "your goal is to make $100 per door..." in podcasts, seminars, bigger pockets webinars, etc.
I understand that the whole idea of getting $100 per door is net - after paying the debt service, insurance, property taxes, property management, utilities, CapEx savings, repairs, maintenance, etc. However, even if we are already accounting for vacancy rates, getting $100 per door seems very risky. One troublesome eviction (they sometimes still happen even with great tenant screening) can crush many months worth of profit if your net profit is only $100 on that one unit.
So... have I been misunderstanding this phrase/suggestion this entire time? Is is the $100 per door also too low for you guys?
Also, how much do you aim to get as a minimum per door? What are the minimum GRM and CAP rates you like to see on your rentals?