Cash On Cash %

[Jermaine Walton]

Newbie Here - quick question. What is the typical cash-on-cash % return you want on a deal? 

Asking as I’m seeing numbers around 6 to 8%.. but was hoping to be in the teens. 

Thanks and sorry if this has been answered before. 

[Jon A.]

I think most people would be pretty disappointed with 6%-8% CoC returns. That's in the general ballpark of current cap rates (i.e. your CoC returns if you used no leverage).

I don't have a specific number I use when looking at deals. How I look at the numbers depends on the deal/strategy but rarely includes CoC returns. Occasionally, though, I calculate CoC returns on completed deals just out of curiosity, and they're always double digits. If I was getting 6%-8%, I might as well invest passively and spare myself a lot of time-suck and headache.