$200 cash flow but cash roi is only 2%

[Jason Malabute]

Looking at a duplex. It is in a good school district and good neighborhood. The asking price is $247k. My realtor said it is not unreasonable to offer $230k. Judging from videos property is in good condition. No major repairs are needed. I will be putting down 40%. I will cash flow $200, but the cash ROI is only 2%.

Is there any circumstance where 2% cash ROI is acceptable? Thank you.

[Andrew B.]

You can open a high yield savings account and get the same 2%. This account is FDIC insured, guaranteed to be there when you need it, and will not ever send you a bill.

Sounds like this would be a poor choice for an investment unless your investing strategy heavily favors appreciation and debt paydown. Its very likely that there are better investments out there though.