What Cash on Cash ROI do you shoot for when analyzing deals?

[Jake Sanders]

What Cash on Cash ROI do you shoot for when analyzing deals? I realize that this question has a lot of unknown variables and will also depend on personal preference and goals. With that said, I know that @Brandon Turner has said (if I remember correctly) on the podcast that he likes to get at least 12% cash on cash return and something like $200+/month in cashflow.

In the stock market I am confident in about an 8% return over the long run so I obviously want to get a better return than that if I am going through the work of buying a property and also managing the rental. But is it reasonable to account for paydown when calculating return to compare to a stock market investment?

I'm analyzing a deal right now that with reasonable worst case numbers looks like about 9% cash on cash ROI and with loan paydown the return would be 16% at the beginning of the loan. Does this sound good? Trying to get a pulse on this deal because I feel like I am at the point where I really want to go after my first deal and I might be letting emotions get in the way of my judgement.

[Brian Ploszay]

Cash on cash is your return when you use leverage.  To hard to give advice on this without all the facts.

I quickly look at two factors.  First, price per unit.  Then cap rate.  If I get deep into a deal, I analyze it further, including physical condition, full financial analysis, etc...