Im a Beginner Wholesaler mainly Marketing in Essex County NJ.
My question would be to Investors in general but mainly those investing in New Jersey. What kind of Cash on Cash returns do you expect on deals that makes sense to you while analyzing and what are your main Decision factors.
Listen to the #askbp podcast #24 I think it will help
This is going to be different for everyone. My self I want at least 15%
@Ned Carey is that annulized or per deal and short turn around for much higher APR?
@Jay Hinrichs That is what I would expect my money to return, when considering an investment. I know I can do better in tax liens. That is about what I would expect as cash on cash from my rentals.
@Ned Carey on an APR basis that's darn nice for rentals.. for sure
Steve Smith thanks I will do so.
thanks for your response. Usually when I analyze deals 15% is what I set as return for my partner investor. I had a deal I was planning on wholesaling this week but seller refuse my offer because it was too low. I'm just being mindful of always trusting my numbers before making an offer. Maybe someone else would have payed more for that deal.
I look for a 10% cash on cash based on actual numbers, not seller proforma.
When you have repositioned the property, the cash on cash will be higher based on your success.
It may be difficult to achieve 10% in Northeast. My market in Putnam County NY is tough. That is why I am investing in another market
@Gino Barbaro Thanks
I guess these numbers are based on the area your investing in and what makes a deal a good deal as well as the investor who may be looking at the deal. So its in my best interest to learn my area the best I can to deliver what an investor would expect.
I'm not sure cash on cash is the best metric if you're selling to rehabbers. Or, I think it actually is, but its very difficult for you to calculate because it depends so much on the rehabber's financing. Someone who's fix and flipping with their own cash may make more profit per deal vs. someone who's using hard money. But their cash on cash return will be much lower because they have much more invested.
@Jon Holdman I Understand what your saying but nevertheless, whether their using hard money or their own cash, I believe knowing a ball park number of what an investor would be looking for in terms of return will better prepare me when presenting a deal to investors. The more I know about the area and what returns are good it would be more easy for me to make decisions on the best offer i can make to a seller with my returns already calculated. If investors are looking for a 15-20% return in specific areas and I have something under contract for lets say 10% I dont think i would have much confidence in selling such property cause it below the norm for what investors are Buying.