How Long to Recoup Investment

2 Replies

Hi BP! I've been analyzing some deals online looking at several duplexes and triplexes to purchase (this would be my first investment deal). 

Currently I'm looking at a $75,000 duplex with 20% down ($15,000). Based on the cash outlay, I'm looking at a total of roughly $17,500 for the down payment, closing costs, and a buffer for repairs. When I did the math with the cash flow, it looks like it'll take me about 4 years to recoup the $17,500 that I would be investing. 

Question:

Is 4 years a decent amount of time to recoup an investment? How long is too long? Any suggestions or rule of thumbs on how long it should take to make your money back? I was thinking if I can make my investment back within 1 to 2 years that would be great. Please correct me if I'm unrealistic. Thank you all for your help!

@Gloria Riley Interesting topic.. 4 years is solid and with REI (at least in Orlando) appreciation happens, therefore; you might get your investment back in equity a lot faster. Obviously, there is depreciation, vacancy, and CapEx, however; as an investor 4 years isn't too bad. If you are new to this connect with@Andrew Davis .. He's up your way and a great connection!

1 year.  If I can't get my cash I put in back within 1 year I don't buy that property.