Cash on cash return - what do investors look for in Michigan?

[Bryenne Korte]

Hi All! I was listening to one of the Bigger Pockets podcasts this morning and Brandon mentioned that he looks for at least 12% cash on cash return on his deals, but that this percentage can be different depending on your area/market. I'm curious what other investors in Michigan are generally looking for as far as cash on cash return? I'm looking for deals in the Greater Grand Rapids area. Thanks!

[Joe Villeneuve]

There really aren't any "strategies" in the sense most REI think, like flip, hold, L/O, etc... I look at entrance/exit strategies as they pertain to my cash...not me...I'm just along for the ride.

The first step is to truly understand how money works, and that it doesn't matter what the total cost is for any money you get.  All that matters is how you are able to manage the cost within the framework of the investments.

There are 2 Golden Rules I follow:

Golden Rule #1:  Under no circumstances will I ever "spend" my cash.  I will "use" it an infinite number of times, but I NEVER spend it.  When you "spend" it, it's gone, and you have to replace it with new cash, with now costs that come with it.  If I "use" my cash, I get it back, and "use" it again, and I get it back again, and...so on, and so on.

There are many tactics you can use to accomplish this, but you need to have 2 other things in your arsenal of tools. You have to know how to analyze markets (noi properties), and to be able to know the difference between a plan, a goal, and a step...then be able to design a REI Plan...and stick to it.