Great investment - and it violates the 2% rule

[William Byers]

Great opportunities exist that violate the 2% rule. I usually start by determining what the return would be on a cash purchase. Depending on the neighborhood, I will seek between 10 and 15% COC return. See a recent analysis below:

This deal yields 13.7% COC in a solid rental area, which was right in my client's target ROI. A more detailed analysis shows this to be an excellent opportunity, particularly with leverage. The client put up 25%, and obtained a 15 year mortgage at 5.25%. The leveraged IRR is over 30% and the first year COC is over 28%.

If want my simple spreadsheet on a cash basis, download the spreadsheet at

http://www.biggerpockets.com/files/user/metroretro...

If you need help with a detailed analysis, contact me.