All Forum Posts by: Jessica Schaal
Jessica Schaal has started 1 posts and replied 2 times.
Post: Question about return on investment
- Investor
- Madison, WI
- Posts 5
- Votes 0
The ROI is calculated off leasing the property for 2 years. If it was 3 years rhe ROI would be 34%
Post: Question about return on investment
- Investor
- Madison, WI
- Posts 5
- Votes 0
I am hoping to begin investing in real estate by purchasing a residential home to use as an assisted living facility. The baby boomers are reaching a more advanced age and many will need assistance with activities of daily living. This is projected to be a huge market not only as a business but as a real estate investment as well (tenants are low impact - not trashing the home, rent is paid, low turn over, etc).
I have a home in mind in WI near where I live, but I don't currently have thr capital for the down payment. I am hoping to find an investor to purchse the property and lease it from them for 2-3 years with the option to purchase once the business is up and running. My question is this, what would you all consider to be an acceptable ROI to offer an investor fpr this kind of investment? The property is listed at $499,999 (and I feel like the price is a bit high). Taxes are just shy of $6,000 per year, so with 20% down the monthly PITI should be about $2,450 on a 30 year mortgage. Total investment would be 20% down payment, taxes for 6 months and closing costs, equalling about $106,000. I was thinking of offering to rent it for $1,000 over the PITI payment, which would be 22.6% ROI. Is this enough? Or should I be offering more?