What's Your Buy And Hold Criteria? (And My Introduction To BP)

[Zach M.]

Hi... my name is Zach. I'm from Southern Indiana/Louisville, Ky. I'm new to BP. I owned a rental for 7 years with ONE RENTER, believe it or not, before I cashed out and used the profits to buy a new house. Now, I'm wanting to get back into it. But, I need some help.

My initial rental was just a house that I used to live in myself before my job took me away. I rented it while I was gone.

Now, I'm actively SHOPPING for my first rental and I've been using the calculator ad nauseum.

My first of many questions is this: which criteria do you all hold as the MOST important when crunching numbers?

I know, I know... there are MULTIPLE other factors that make each purchase unique, but narrow it down for me on the numbers side... is it Cash On Cash ROI? 2%? 50%? What rules do you abide by? Just looking for some different opinions.

Thanks and looking forward to chatting with others!

[Jaysen Medhurst]

@Zach M., cash flow, especially when starting out. I think anything $150/month/unit with 25% equity is a winner. I also really like the BRRRR strategy, so ultimately you can keep recycling your cash for more deals.

50% rule is good for very rough looks.

2% rule is tough to come by. More like 1% for most investments.

Check out Frank Gallenelli's book to really dig in. I think Internal Rate of Return (IRR) is a very good, if somewhat complicated, metric to use.