What kind of COC returns do you like to see in Multi Family ( duplex- Quad)
I am looking into a Duplex in the Minneapolis area and based on my max allowable offer my cash on cash return would be around 4.5%.
What is your COC return goal for a Multi Family property?
Quote from @Kyle Donlea:
I wouldn't invest in anything for less than 12% unless there were an appreciation factor at play.
Why bother with the stress of tenants only to get a return lower than you would get with a basic mutual fund?
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#1 Personal Finance Contributor
- Rental Property Investor
- East Wenatchee, WA
Quote from @Kyle Donlea:
What is your COC return goal for a Multi Family?
Leveraged 12%+, cash ROE 7%+.
in expensive markets I shoot for equity capture at the buy of 12%.
2 yr treasuries risk and hassle free are paying 4%. No way I'm messing with RE and tenants for less than 3x risk-free returns.
I'm looking at 8-12%+ CoC opportunities, if your limit ables, I would suggest that you increase your unit count to 3+ units for better economies of scale.
11% minimum return, comprised of 6% cap, 3% appreciation, 2% loan paydown
@Kyle Donlea if your COC is 4.5% can you increase it? Are you able to add value, bedrooms etc? I have bought properties below my 10% COC requirements because I know I can add money and increase value and rents. I bought my duplex for 465,000 but currently rent 1 side for a little below market at $2,100 and will most likely midterm rent my side if I ever move out and make 5-7,000 a month on that side (during the summer). If you are not working with a realtor reach out and I can help you with this
@Kyle Donlea with a duplex STVR I would want the management company to pay me 10% of my purchase price of property in lease payments to allow me to earn 18%+ Cash on Cash after putting 20% down. Management company pays for prop tax, insurance and interior maintenance. Also they pay for furnishings.