Cash flow expectation

[John Johnson]

I know this will very from deal to deal but how much cash flow will you get on a home you are financing and renting out. is there a rule of thumb or a percentage that you can expect to get. I understand that it will also depend on the length of financing as well. if someone could help me out and break it down into simple terms it would be appreciated.  

[Dustin Beam]

I'm under contract with my first properties, but I preferred to look at cash on cash return over other  rmeasures. It's not totally different than $x/door, but I like it better because you take into account your down payment, closing costs, etc.

Look at it this way, if you make $150/door on a duplex, but it costs $200k to purchase (@ 20%, that's $40k down), then your COC return is 9%. $150x2x12=$3600 3600/40000 = .09.

Let's say instead you buy a duplex for $100k, but only make $100/door. Now $20k down and yearly returns of $2400. But 2400/20000=12%.

I'd rather make less and have higher returns. Then I could theoretically buy two of those $100k duplexes with the same amount of capital.