Hey guys, broad question here, and I know there are a lot of variables but i'm wondering what you're looking for in terms of cash flow when buying a rental property. For instance if it's only cash flowing around $100 after ALL the expenses are you even dealing with it? What number would you call a "deal?" By the way, i'm talking about your typical single family home (3br/1ba etc).
I went under contract on my second rental today and looking for reassurance that i'm getting an ok deal. It's a 3br/1.5ba within 2 minutes from downtown (arlington) for $64k. After all the expenses it will cash flow $192/month. I'm having it inspected this week but when I looked at it last week it seemed to be in tip top shape. Couldn't find much wrong with it and looked good inside and out. After running numbers in BP calculator this deal gives me 9% pro forma cap rate and 14.4% COCR.
Chad, that sounds like a good return. Your numbers are right in line with what I look for in a hold rental.
If it is a CASH deal I am looking for $540/month in cash flow and $250 on financed. That being said I would entertain other deals but those are my goal numbers.
What is your goal in investing?
I shoot for $200/mo 15% CoC and 30% equity above what I have in the deal so you look to be in line with what I shoot for assuming the equity is there.
I think it really depends on your goals. @Account Closed has a great sheet on getting your "freedom number" that makes it very easy to determine what is a "Deal" for you.
Basically you need to clarify your goal and reverse engineer it.
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@Chad Deberry curious to see how this played out! The numbers looked great.
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