Rental Portfolio Deal Analysis Question

[Jeff Amore]

Generally speaking, would buy and hold investors consider a purchase of a portfolio of rental properties, 90% occupied, for 85% ARV if that 85% resulted in acceptable cashflow (say $15,000/month) and over $2 million in equity? I always see the 70% rule bandied about, but something like this seems like a different beast.

[Justin R.]

I've never looked at deals in terms of ARV first - more important is return on equity. And, any absolute numbers for "cash flow" or equity are sorta useless without knowing the size of the deal.

And, of course it's highly dependent on location, neighborhood characteristics, and the investor's preference for product type.