As a real estate investor, what do you look for when you are analyzing cash on cash return and cash flow. What is considered good, great. bad and ugly?
Hey @Robert DelVecchio . For buy-and-hold deals, I look for a Cash-on-Cash Return (CoCR) of no less than 11%. Anything 15% or higher and now you've got my undivided attention!
Cash-flow-wise, I'd like to see at least $200/mo on a single-family house, and I'll accept somewhat less per door for multi-family properties.
@Robert DelVecchio I’d throw the classic “10% cash-on-cash” metric out there but I have to admit, it’s not what I live by. There has to be a threshold to make it worth (my) while. At the moment if it’s not going to throw off (on my paper pro-forma) $1K per month I usually take a pass on it. So that leaves me with a very narrow area to focus on. It means I can’t look at those $50K homes. But I might be able to look at 10 units for $500K and see how that looks. I also have a higher threshold (risk return) if I look at a market that I don’t know...yet. Not to say my ideas are right vs. wrong but they work for (and are relative) to me.