Real Estate Agent · Salt Lake City , UT · Member since 2017 · 155 posts · 92 votes
Hi everyone,
I am curious what you try to get for cash on cash and cap rate. Im working a deal that is 5.32% cap and 8.48 COC. I like it because it is a pretty low down sub to deal with a 25 year mortgage that I can take over. Just curious other peoples thoughts. It is in Utah and finding things that cashflow is pretty difficult.
Investor · Provo, UT · Member since 2016 · 759 posts · 626 votes
3y
At a 2.75% rate, I would move on it and wait it out for the next five-plus years.
Like @Matthew Masoud said if there are value add opportunities that could be what makes it a homerun.
The second question I have is can you afford to lock up the capital needed, otherwise, it sounds like a good deal to me. Maybe think about a lease option with a 20% down as well.
I am curious what you try to get for cash on cash and cap rate. Im working a deal that is 5.32% cap and 8.48 COC. I like it because it is a pretty low down sub to deal with a 25 year mortgage that I can take over. Just curious other peoples thoughts. It is in Utah and finding things that cashflow is pretty difficult.
Thanks,
Eric Gardiner
Okay, you've lost me. Why buy a house that just sits there?
When buying Subject To to hold, the value is in the difference between the mortgage costs and the rent. If the mortgage is $1,000 a month and the rent is $1,500 a month, that's akiller deal. Cap rates and COC don't facor in, in my opinion.
When buying Subject To to fix & flip, the value is in the projected ARV minus unpaid principal, any money to the seller, holding costs, minus rehab, minus taxes, minus sales costs. If you like what is leftover, then it's worth doing. Don't assume appreciation,that was yesterday's play.