Is 4-5% CoC annual return to low?

[Matt Perez]

Hey everyone ,

I am a newbie investor. I am looking out of state because where I live in California is just to expensive. As a newbie I am looking at homes that are "turn key" and could get 4-5% annual CoC. I know people get 8-15% or more but have to do all the rehab and dealing with contractors. Being I'm not all that seasoned yet would 4-5% ready to go be a bad idea?

Curious on peoples thoughts on this one.  Not home runs but it does get my money working. 

[Bill B.]

COC is mostly useless. Would you rather make 100% yearly return on a $1 investment or 50% on $10k, or 25% on a $1million.

All real estate investments should eventually hit infinite return after a cash out refi. 

That being said, the first year really doesn’t matter. If you pain to hold the property for 10 years figure out what your average return will be over 10 years with rent increases and appreciation. (Try to figure out where you’ll be in 5 years, that’s probably your average.)

Ps. If your interest rate is above the 4-5% return you’re getting you can increase your return by simply borrowing less.