What is a fair COC return to target for a passive investor

[Sean Dezoysa]

Hi all,

On the Toledo forum I mentioned hoping for a 10% cash on cash return for turnkeys and several people said that's too low for Toledo. That's always good to hear.

Plans have changed a bit and I think I now prefer to deal scout the MLS with an investor friendly agent, then giving her local management duties while I do my part remotely in terms of marketing vacancies, payment handling, repair requests etc.

What range would you guys target as a cash on cash return for C/B properties that are reasonble MLS deals but nothing stellar? Bank financing 75-80% loan to value.

Maybe 12% cash on cash return, up to 15% max? Putting 20k down that would be $2,400 to $3,000/yr in net cash flow. Seems like a pretty high amount to me, I'll take it if it's sensible though!

[Stone Jin]

@Sean D we invest in Toledo area but wanted to point out that what you are describing is not passive. You are actively managing the realtor, the VA, the tenant etc.

With that said. The rents are strong in Toledo but deals are harder to come by. The cash on cash changes if you use financing or cash. You need to lay out the full strategy to compare apples to apples.