Cash Flow vs Equity in a hot Market

[Toby Goodroad]

Trying to assess multiple opportunities in a hot market.  Currently focused on lower end condo/townhomes.  The home prices making it hard to pencil a positive cash flow.  However cap rate is 5% on most properties and when considering equity increase over 10 year period my returns are 15%-20% YOY.  Market appreciation is 3-4%.  I don't need the cash flow to invest in more properties and I am a patient investor with a steady job.  Can anyone help me decide to invest or move on to a new market.  Thanks.

[Bryan Blankenship]

@Toby Goodroad Like @Anthony Simboli said, you just have to figure out what you really want and what sort of risk you're willing to take to get there. Are you absolutely set on that market for some reason, or is it just something you are considering? Is it a distance thing? We regularly see 7-8% CAP and great cashflow here in Ohio, and similar appreciation rates, as do several other Midwestern markets. It all depends on what's ultimately driving you and what you REALLY want to get out of it. Are you investing to give you something fun to do? Are you wanting to be hands on or hands off? Lots of factors to consider :)

Good luck!