Cash on Cash Returns

[Rick S.]

What kind of Cash on Cash return is typical for a financed, SFH in a blue collar area in FL? From things I read on this site, some people are getting 20 - 30+%... from my calculations I am seeing 5 to 10% on homes I am interested in. Am I missing something (see below figure)?

283,000	Purchase Price
56,600	Down Payment (20%)
20,100	Rennovations
12,000	Closing Costs
88,700	Total Cash

30,000	Annual Rent
2,652	Insurance Annual
3,900	Taxes Annual
1,440	Landscaping Annual
1,200	Pool Annual
900	Vacancy Reserve Annual
1,200	Maintenance Reserve Annual
11,292	Total Annual Operating Expenses
12,600	Mortgage Annual
23,892	Total Annual Expenses
6,108	Annual Net Profit
6.9%	Cash on Cash Return

[Cal C.]

Originally posted by @Rick S.:

Thanks all for the comments. I am looking into South Florida - Miami and Ft. Lauderdale. The home is a 3BR 2 BA in an upper middle class area with great schools. So, I guess from what I read, CCR of 5 to 10% is fine based on my target area?

Interesting upper middle class is blue collar in fl. :). Just kidding I realized you meant white collar.

I strongly suggest you look at a much lower price point to help ensure cash flow and not be hit by longer vacancies. There are a lot less people out there looking for $2,500 a month properties than $1250 a month properties