What ROI Do You Settle For?

[Timothy Hero]

 I see investors with numbers that seem very low and some with numbers that seem unrealistic.

I tend to see 14-16% ROI on average, but I've seen as low as 10% and as high as 40% for residential rentals.

I'm curious to hear what the BP community is getting in today's market and what your minimum is to satisfy you and for you to consider it a great investment.

Anything less than 25% doesn't seem to satisfy me. I can't bring myself to write a check for $150k between the downpayment and closing costs only to receive 15% ROI, or $22,500 on my money. I can have $150k in the bank or I can make $1,875/month. To me, those numbers don't satisfy me. 25%+ does, however. I spend $150k and make roughly $3,000/month and now things begin to unfold better. I know getting a 25% ROI means either solid MFH investments or getting the property in foreclosure or something and rehabbing. In other words, the BRRRR strategy.

Obviously appreciation plays a part and if you're getting the property at a great price. But appreciation factors aside, what's your minimum ROI you'll settle for and what are you currently getting?

[Joe Villeneuve]

Originally posted by @Timothy Hero:

Originally posted by @Joe Villeneuve:

All of the above. The ROI I need is specific to that time period, and is based on the criteria needed from each specific timeline in my Plan.

Would you happen to know your current average?

No.  It's not important to me...the average that is.  I know what it is at any given time, but I don't keep score...and I don't measure my returns based on percentages anyway.  I measure them based on achieving the dollars needed at the time I get them, based on what the plan says I need.

If the plan says I need to add $???/month, I "use" my seed money to get that dollar amount, making sure that in the process I'm also getting my seed money back.