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Updated over 1 year ago,
Help me underwrite! Focus on CoC, IRR, or ROI?
When underwriting properties, I look for a 5-year ROI of >100% and an IRR of >12% (screenshot below of how those are defined). Please let me know if this is off-base.
I am familiar with valuing companies, and I think these are the minimum returns needed when compared to alternative investments like the stock market.
Should I be paying more attention to CoC return?
Below is a picture of a duplex I evaluated. The CoC is terrible. But the 5-year ROI and IRR look okay.
My goal is to hold the property long-term.
Please help!