Cash on Cash Target on BRRRR

[Rocky Santa Cruz]

I have been reading and researching as much as I can about the BRRRR method and have been working some figures on some possible properties. From my research 12% + cash on cash return is a great target. Just for clarification should this be what the cash on cash return is on year 1?

[John Leavelle]

Howdy @Rocky Santa Cruz

12% + CoCROI is normally a good target for most Buy and Hold investments. However, the goal of the BRRRR strategy is to recover 100% of your cash invested. That means a target of "Infinite " CoCROI. 12% means you left a significant amount of cash in the deal.

We want all of our cash back so we can invest it in the next property.

The reality is we end up leaving some cash in some of the deals for one reason or another.  We may want to lower the Refinance loan amount to improve Cash Flow.  The new appraisal may be lower than expected and you are not able to pull all your cash out.  If you complete your analysis and due diligence correctly you should be successful achieving that goal more times than not.