Buying Decision - 4 plex

[Greg Heden]

When analyzing a deal, should one factor in future appreciation, annual mortgage reduction, and tax savings from depreciation (offsetting other passive investment income) when calculating ROI? I am looking at a property that will take some time to polish out. The COC return doesn't warrant the investment but the total return paints a different picture. From a buy-and-hold standpoint, how much weight should I give to this total return?

[Joseph Palmiero]

Focusing on the potential tax savings, I think that is a personal decision you will have to wrestle with.   For me personally, I like a deal to work on its own and consider the tax benefits to be gravy.  Also, not including the tax benefits will also build in a margin of safety in the deal, just in case one or more of your assumptions turn out to be wrong.