5% cash on cash ROI - better to start out anyway or wait

[Jiseok Kim]

As a first timer in the real estate investing, I wanted to start out easy.

So I have been primarily looking for easy properties nearby in a good school area, cleanly managed, good neighborhood and etc although the listing prices were way beyond the 70% or 80% rule.

Then it turned out that every properties that I considered to offer are expected to generate disappointingly small cash on cash return of around 5% at best when it's bought in full cash. (It barely breaks even when it's financed with 40~50% downpayment.)

Because of this lower than expected return (considering 4.xx% interest from saving account), I have been stepping back at the last minutes.

So what would you suggest?

Is it better to jump in for this 5% return and start out anyway or better to wait until I find a property with average return of 8~12%?

For the area where I am looking properties, it's definitely a seller market.

There's no room to negotiate or low ball the purchase offer. Nice properties are sold usually >10K listing prices now.

Please share your wisdom.

[Jaron Walling]

"There's no room to negotiate or low ball the purchase offer." - False, you're just looking at the wrong properties. Find/buy/create an opportunity for yourself or keep waiting.