Author Topic: Minimum Cash on Cash ROI Rate or Minimum Total ROI Rate - Multifamily's  (Read 349 times)

Enough

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  • Posts: 189
  • Age: 32
  • Location: KY
Hey all, anyone still buying multifamily properties? If so, what are your minimum cash and total ROI rates (assuming financed)?  And for what property class?

For example, my threshold was 15% COC / 25% Total ROI for class C properties and 8% COC / 15% Total ROI for class B properties

Throughout 2015 - 2018, I was able to find, compete and purchase properties meeting and exceeding these thresholds. But recently, although lowering my ROI thresholds, and looking very hard, I still haven't been able to compete and get any accepted offers through.

This week, I put an offer in on a Class B(-) property that I estimated at 1.5% COC / 15% Total ROI and where the counter came back. I'd be at -0.14% COC / 13.4% total ROI.  I don't think I should take the risk of buying a cash flow negative property on the hopes that rents continue to rise and there are no major unexpected costs to where in 5 years I have a decent cash flow. Agreed?