Investor · Los Angeles/Orange County, CA · Member since 2009 · 30 posts · 2 votes
Hi, I hope I worded the Subject Line correctly. If you are a Cash Investor for Rentals, what is a good net price per door $100? Shouldn't it be a little more?
Real Estate Investor · OH · Member since 2008 · 4k+ posts · 1k+ votes
17y
The fact that you are paying cash has absolutely nothing to do with the true cash flow. The money you paid for the property is still worth something and there is an opportunity cost to using it to buy a property.
So, whether you are paying cash or not, I would still do the cash flow analysis as if you borrowed 100% of the purchase price (and initial rehab).
On the other hand, if you decide that your money is truly worthless, I'll be happy to borrow as much as you have at 1% interest. You'll come out much better loaning it to me at 1% than loaning it to yourself for free.
Boonies, PA · Member since 2008 · 333 posts · 15 votes
17y
Usually when I pay cash I will hold the property for a month or when ever I feel like refinancing. To me if the cash flow is a good % return then why refinance if you don't have to. Personally it doesn't make sense to refinance when you get 8% return. Anyway when I do refinance I take some out maybe $2,500 over what I have invested in the property. This seems to be working out ok. I just put $10k down on the principal of one of my loans.
I'm not sure were the $100 a door comes from. I always looked at it as ROI. My strategy might be different than most.