1% Cap Rate or Cash on Cash?

[John Peter]

What metric do you prefer when first analyzing a property? 1%, cap rate, cash on cash, etc. What do you think is the most useful? I'm looking at 2 fam in Tampa as my first investment in my new area.. probably will hold for 5-10 years. Not one of them comes close to the 1% rule unless the price comes down 50k+.. but some of the other metrics make a bit more sense when you tweak them only a little. 

Also, what's your go to number for cash flow per door? Some say $200 I'd their number, others won't even bother unless it's over $500.

[Jeremy Kloter]

If leveraged cash on cash should be a big factor. We typically go off of this when taking down flips and rentals. Although you want to look at other metrics its a great place to start. The 1% rule hasn't really existed in our local market in a long time. Cash flow per door depends on the investor and price point. If it is your first deal or so, just get into the game to start. We've had the benefit of rising rents and when rates decrease you can refi and increase the cash flow.