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Updated over 6 years ago on . Most recent reply
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$100 dollars a door?!?
I wanted to see what everyone's thoughts were as far as how much per door you look to get on an investment.
Do you look to make at least $100 dollars a door after all is paid (Mortgage, Taxes, Insurance, Property Management, Repair %, Vacancy %, etc..) ?
Most Popular Reply
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When I analyse a potential property I start out assuming 50% expenses and debt repayment based on 100% financing on a 30 year. If those rough numbers do not show a minimum $100/door I don't bother looking any farther. If you do not base your calculations on 100% financing 30 year then you are not calculating the cash flow produced by the property itself. You can not include cash flow purchased with equity, as @Michael Plante includes, since it is NOT produced by the property.
Always keep in mind when investing in income properties that every property has two separate income streams. On is the property itself the other is your own cash sitting as dead equity. Two distinct income sources that must be separated to be able to assess the true value of a property. If you do not separate them then any fool can throw as much cash as needed to "polish a turd".