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Updated almost 11 years ago on . Most recent reply

Account Closed
  • Residential Real Estate Broker
  • Austin, TX
21
Votes |
146
Posts

What financial criteria to you focus on when deciding to do an investment?

Account Closed
  • Residential Real Estate Broker
  • Austin, TX
Posted

So what is the main thing financial criteria you're looking for: Cashflow of a certain amount?, a certain roi percentage? Buying for certain percentage of ARV? Cap Rate %?, Cash on cash ROI %, IRR? ?????

I appreciate your answers...

Most Popular Reply

User Stats

128
Posts
56
Votes
Susan Gillespie
  • Investor
  • Saint Paul, MN
56
Votes |
128
Posts
Susan Gillespie
  • Investor
  • Saint Paul, MN
Replied

As a buy and hold investor, I look for positive net cash flow.

Second, I look at internal rate of return (IRR). I agree with@Bill Jacobsen that it's the gold standard for evaluating real estate investments.

Third, I look at the net present value of cash flows. Used together, these are powerful metrics to evaluate and compare properties.

I look at cap rate for commercial property analysis, but not for single family properties.

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