Positive COC and negative ROI?

Question

I’ve just started to practice analyzing deals and I came across a deal that looks good in prospect. It’s a multi family that rents for 200+ each side that is selling for 190,000 which looks to be a good deal to me. It has a 12% cash on cash return which is what I’ve heard to shoot for but a negative ROI. I don’t really understand why so I could use some help explaining. The address of the property is 1306 E Sylvan Ave #1308, Appleton, WI 54915. Along with that what is the best way to practice analyzing properties and is there any good video of one of the bigger pockets guys analyzing properties so I can get a better idea of what they are looking for and how they create deals? Thank you.

Evan Huiting · Answer

I'm not looking to buy just quite yet. I'm going to college and living on campus starting this year. I plan to buy a multifamily BRRRR house hack during my second or third year at college with an FHA loan. Right now I'm just practicing analyzing deals. I heard somewhere that Brandon Turner did a lot of webinars where he would analyze a deal in each one. Are those archived somewhere or is there something else like it because I think it would be extremely helpful to see a professional walk through the process of analyzing a deal multiple times to pick up on the things that stick out to them.

Dustin B. · Answer

In the area as well... The big question is what would be your purchasing strategy there? House hack (30yr fixed)? Purchase as investment (variable lengths)? Quite a bit of variables that change how much your down payment would influence your mortgage costs which would also lead into your COC and ROI.

Steve Donovan · Answer

Hello @Evan Huiting  I am a very active investor in the Appleton, Oshkosh and Fond du Lac areas and would be happy to give a second opinion on potential deals.  Just private message me on here.  Best of luck in your investing future!

Joel Allen · Answer

@Evan Huiting

BiggerPockets has a YouTube channel with tons of videos and content.

One of the videos shows Brandon Turner analyzing a property in about 10 minutes.  The video is one of the more popular BP ones with over 400K views…YouTube search

“How To Analyze A Rental Property (The Quick & Dirty Way)”

If you want to watch a more in-depth deal analysis from Brandon, there’s a 40-minute video…YouTube search “How to Analyze a Real Estate Deal LIVE with Brandon Turner”