If appraisal was unlimited, how much equity would you pull out?

[Igor Messano]

Hi everyone,

I am curious to know what you guys target in returns when you buy a deal at a significant discount. Putting no limit on the bank's appraisal of your property, what are the financial measures you look for so that you can still keep a healthy investment? I've been thinking about this recently and this is what I have so far.

Cap Rate - 10% (Depends on your investment area)
Cash Flow - $220 per unit
DSCR - 1.5 (In case rates increase with balloon payments.

I am leaving out CoC since cash-out refinancing can mean 0 to little cash invested so this becomes a skewed measure.