All Forum Posts by: Sammy Patel

I have a basic question that came up when dealing with my realtor. Using the BiggerPockets rental calculator you get a Cash on Cash ROI. However, it uses the P&I in that calculation. Does that COC ROI represent what I am actually getting since the Principal in the P&I will be actually returned to me when I cash out, so in other words if I was analyzing a rental property with P&I and the COC ROI was a small <2% but when I subtract the Principal it would give me a COC ROI of 10%. Isn't that the more accurate ROI?

Any and all help is greatly appreciated!

Thanks Bill.

We are interested in 3 bedroom condos and townhomes in the Northern Virginia area. We are looking for properties in the $200k to $300k range. We are willing to rehab and then rent and would actually gravitate to those that will provide some equity as long as the math works. 

If there is any more info needed please let me know.

My partners are looking for a Realtor to assist us in finding good investment properties in the northern Virginia area. We are primarily interested in rental properties but open to flipping as well.

If anyone has anyone they would refer please let me know. 

Any and all help would be greatly appreciated.

I did look into this and have found that some hard money lenders require an LLC.

So based on the pros/cons, what is the right thing to do. Again, new to this so I appreciate the feedback! @Jeff B.

Isn't the unit itself the asset they want? I am even more confused as everything I have read and seminar I attended states to put rental properties into an LLC. I have to assume every day people are refi'ing those!

We are looking to buy a property with hard money for 6 months as a rental unit. My two questions are:

1. Do we have to wait a certain amount of time to refi?

2. If we do want to refi after renting 6 months can we refi if it is in an LLC? Does owning it in an LLC cause problems when we go to refi?

Thank you for your response. So in theory I would want to walk away from this deal since the COC ROI is close to 2% even though we would buy it $45,000 below market value today?

I understand the cash flow part and it makes total sense, but to walk away from $45K equity (understanding it isn't real until we sell) is hard to swallow. If for example we sold next year, we would have that $45K in equity minus selling costs coming to us. Let's say it ends up being $30K after selling costs. That would be $2,500/month I walked away from not including the 2% COC ROI (Using BRRRR). That is a full pay check for some.

Thanks for responding to my posts as I am new and still trying to understand the business. Much appreciated!

To clarify. When I put in the values for the calculator the results state COC ROI is 2%. So looking at that it is a bad deal. Howver, we are buying below market $40K. So shouldn't the total ROI be somewhere in the results factoring in the built in equity at purchase of $40K?

Does the rental calculator on Bigger Pockets take into account the equity in the property when calculating ROI? It seems the ROI on the calculator is based on cash flow and cash put in. But if I wanted a ROI including the actual equity in the property as well as the cash flow, it does not seem to tell me that, why?

If this is the wrong place for this question please let me know.