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Updated over 6 years ago,
No money Down Opportunity in Utah
I've got a potential Opportunity to acquire a property with no money down. It's a 4-plex.
My question about a no money down opportunity has to do with how to analyze the numbers? Because I have no money down, any cash flow generated would result in an infinite ROI. For instance, if I acquire a property worth $500,000 and it looks like it can cashflow at $250/month, my initial total investment would be $0. Therefore my ROI is infinite. The market in Salt Lake City, Provo, Ogden, and Logan is crazy right now, so financing anything is really hard to justify. CAP rates are regularly between 3-4%. But I need to get into another deal, and the future looks promising. So my question is this: is it okay to justify 2-3% CAP rates if my ROI is infinite? and if so is there a lower limit on the amount of cash flow I should expect on any given property?
Thanks for your feedback!