CoC and Cash flow question

[Ashley Guerra]

Hello all,

New, beginner investor with a burning question: is it a good deal to have positive , $94, cash flow, but a low CoC at 1.5%?

I have found this property but a rule of thumb is "a good deal is between 8-12% CoC" which this property doesn't fit.

Should i keep on looking and avoid this one? Cap rate is 5.6% if that makes a diff.

my main goal here is to create passive income by buying either a single family home (this deal), or a condo/townhouse to house hack

[Taylor L.]

1.5% leaves very little margin for error. Projected Cash on Cash returns are just that - projections, based on assumptions. There it will vary over the months and years. As a beginner, it's almost guaranteed that some of your assumptions will be wrong, such as underestimating your expenses. I'd keep looking.