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Updated about 3 years ago,
CoC Return vs. Pure Cash Flow
First of all, I'm very new to this, so I've just been trying to learn as much as possible. I have been researching properties around my area and using the rental calculator to determine if it is a good deal or not. A couple of rules I have been trying to follow is at least $100 in pure cash flow per unit, as well as a 10% CoC return. However, I keep getting hung up on the second metric. If I were able to purchase the property with cash, my CoC goes down significantly. Can someone help me further understand the implications of cash purchases? I feel stupid for not grasping this concept.