Which is more important, high ROI or bail with no loss

Question

I'm a total newbie here and I've been practicing crunching numbers to decide if a unit is worth it or not. I'm kinda stuck on which is most important to make my decisions on buying or not buying, good ROI or selling without a loss if things go bad? So here's my example below:

Asking price is $44k, being all in at 75% is 39k after rehab. Similar Comps in the area are going for 52k ARV. We settle for 38K minus rehab cost.

Unit rents for $800 p/m

Down payment is $7,600.00, was off on numbers and ended up spending 10k in rehab, so my TI is $17,600.
After expenses cash flow is $231 a month. My ROI is 16%. So in roughly 6 years I'll make my full investment back.

Things go bad and I have to bail after 3 years and the most I can get ARV is 52K. I'm still invested 9k plus let's say 27K still owed on the loan on the unit.

Which is more important, a high ROI or being able to bail out with little to no loss if things go south?

Steve Vaughan · Answer

I used to gamble and was pretty good at it, especially blackjack  / 21.

I quit because the pain of losing, for me, was about 3x greater than the joy of winning.  It's personal and different for different people.

This was also discretionary income, not what I needed to eat. The pain of losing necessary funds would jump to 10x pain/reward I'd estimate.

Be very careful risking necessary funds. First rule in the investing game is don't lose money .

Theresa Harris · Answer

Bailing, but look for a good investment.  With your numbers, you will want to find out the minimum amount a bank will lend you.  I've heard others say most won't do mortgages on houses under a certain price point.

Joe Villeneuve · Answer

Bail out.

Which is more important, high ROI or bail with no loss

Which is more important, high ROI or bail with no loss

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