I'd love your opinion on a couple Cash on Cash Return questions

[Chris John]

Hey all

I'd love your opinion on a couple of cash on cash return questions.

First, what amounts (percentages) do you personally use when estimating maintenance and vacancy costs?

Second, what do you consider an acceptable cash on cash return for your investments?

Thank you and best wishes.

[Steve Morris]

First, what amounts (percentages) do you personally use when estimating maintenance and vacancy costs?

Maintenance - Is it brand new and no elevator - $500/unit/year is plenty. OLder stuff up to $1500. Maint is NOT CapEx.

Vacancies - Look at recent historical.  However, most underwrite at 5% of unit-months.  A LOT depends on how quick you can turn.

Second, what do you consider an acceptable cash on cash return for your investments?

I'd be happy if buying today an honest 5%.