Whats YOUR Metrics for Buy and Hold investments?

[Robin J.]

Hi BP,

In California (my local market), I'm having trouble deciding which metric to use for buy and hold investments and what I consider a "good" percentage for metrics like IRR or Cash on Cash return. I'd like your input on what metrics you use and what % or number you look for in your investments.

In summary:

1. What are your key metric criteria's you set for yourself (what's the number on CoC, IRR, etc.)
   
   • I've been looking at IRR as my metric given that Bay Area does not cash flow well. IRR seems to be the better metric since it accounts for the appreciation/value-add you get in the event of a sale
2. How did you determine for yourself the right number? Do you lower your expectations or switch markets if your market doesn’t meet this number?
3. Is buying at a discount a must for building instant equity on the buy? In the Bay Area, MLS properties usually go 5-10% more than listing price.