Cash on Cash ROI...reality check

[Samantha Soto]

Hello everyone,

I'm new to this and working on acquiring my first deal along with my husband @Jose Soto. We are looking for properties in the Huntsville, Al area. We have primarily been looking at SFR. We have been using the rental property calculator and have been trying to make offers that get our Cash on Cash ROI to 11%. The hard thing about this is that many of the properties we are looking at are below 100k. For example, one I am looking at is listed at 87k. In order to make the numbers work for 11% I would need to offer 53k. It just seems highly unlikely to me that anyone is going to want to accept such a low offer. I even feel bad asking realtors to make these offers...like they are going to think I am wasting their time (except @Christy Harris, she has been amazing and hasn't laughed at us one...at least not to our faces!)  Anyways, I was curious to hear from the community, specifically people who have SFR's....what is the typical cash on cash returns that you get for your properties?  Do you have any with lower cash on cash ROI's that you are still happy with?  

Any words of wisdom for this newbie who is eager to buy but also wants a good deal?

[Mike Hanneman]

I don't ever feel bad for making a low offer, especially if your numbers back it up. The worst that happens is you don't hear anything back. If a home has been on the market for an extended period sellers could get motiviated to sell and are just waiting for the next offer to come in.