Are there CoC 8%+ markets (without needing rehab)?

[Angel Wu]

Anyone know of any markets with CoC of at least 8% without having to rehab? Is that even possible with today's interest rates? I'm new to this so need your input. I identified a hot market (Columbus OH) and analyzed many SFH/duplexes on and off market and found that the CoCs I'm getting are negative (A/B) to at best 2-3% (B-/C). One thing that is difficult to account for in my analysis is the actual property tax. My realtor has told me that the property taxes are based on assessed prices and that the county reassesses every 6 years, but that the worst case scenario would be 2% of purchase price if they reassess upon sale so 2% is what I've used in my calculations. The rest of the expense, I went with standard numbers/what my realtor suggested for the area. I can't imagine investors are investing for this type of CoC so does this mean they are only buying for appreciation? I get rehabbing to unlock value is crucial in REI success, but as a first timer and out of state I'm just not up for that yet. With all of that being said, if I'm not up for buying for appreciation and not up for rehabbing, then I should probably hold off on buying now, right?

[Scott E.]

I don't know your sub market but I'll say this - Achieving a true 8% cash-on-cash return on a turn-key single family home in ANY market right now is going to be challenge. Some deals might be marketed as 8%+ but then you realize that it's a 100 year old house and they didn't account for repairs, maintenance, or Capex. Which will fizzle that return down quick when a big expense inevitably comes up.

The only turn-key place I've seen 8%+ cash-on-cash returns in my market lately has been in commercial, specifically medical condo units with a sale leaseback structure. They offer higher cashflow returns in exchange for you paying a premium for the deal.

There is money to be made in this market. There is money to be made in any market. It is just more challenging during times like this where property values are high and rates are climbing as well.