No cash flow or cash on cash return

[Alan Duff]

Have been looking at properties and working the numbers for the last year or so. Just looked at a duplex in an up and coming neighborhood. For the first year the cash flow is less than $300 and the cash on cash return is 0.75%. This is using normal expenses, deducting mortgage principal and no management fee. Numbers are impacted by available financing which is non-owner occupied, paying 30% down and a 15 year ammo at 4%.

It takes six years of projected rental income increases to get to a $2,000 cash flow and a 5% return.  Looks like a big investment for little return. Not sure if  the market is too hot just now or my expectations are unrealistic for current conditions.

[Steve Bracero]

@Ayodeji Kuponiyi

I agree, 100/door should be a minimum. Great advice. You may want to expand your search area into a nearby market. It may take 100 deals to find one good deal where you get an offer accepted.. In my area it is difficult to find deals but it is the consistency that counts- Analyse a few a day and learn the process will lead to great results over time