Getting 10%+ Cash on Cash return

[Jason Lam]

New perspective investor here and I’m trying to just learn as much as I can reading and listening to BP podcast/webinars. An episode of the podcast the investor said he’s looking for at least 20% cash on cash return while on the webinar I heard the investor was looking for at least 12%.

Running the numbers assuming rents bring in roughly 1% of purchase price and I put 20% down I’m getting closer to 5%-6%. Am I missing something here?

Here is an example of my calculations

Purchase price: $150,000

closing cost: $3000

Rental income $1,500/mo

Mortgage assuming 20% down at 5%: $645

Insurance and tax: $200

Vacancy (5%): $75

Repairs (8%): $120

Capex (8%): $120

Property manager (10%): $150/mo

Cashflow: $190/mo

Cash on Cash: $2280/$33,000 = 6.9%

How can 12%+ or even 20% be possible with 2% rent?