Cash on Cash Return 27.76%! In CT!

[Rick Santasiere]

Purchase price: $55,000

Repair Cost: $11,000

ARV (based on cap rate): $183,000. (Keep in mind, comps would never justify this figure, but I Wanted to insert just to show the income value) In this town, there are very few MFR's.

Cash on Cash Return: 27.76%

Purchase Cap Rate: 30.31%

Monthly Expenses (See below): $1,348

Monthly Cash Flow: $1,527

Annual Income: $18,322 AMAZING!!

Vacancy:	$143.75	Repairs:	$143.75
CapEx:	$287.50	Electricity:	$200.00
Insurance:	$142.00	Property Taxes:	$306.17
Oil:	$125.00

Connecticut Multi family. 2% rule and then some!  A truly great one.  I am so grateful for the relationship I built with the seller, as well as some great tenants who help keep this property providing huge rate of return for my portfolio. Thanks BP for the mortgage calculator!! 

[Rick Santasiere]

@William Collins.  I am holding for cash flow because that seems to make the most sense from a dollars and cents perspective. If I could sell for $160k for cash, sure, I would probably sell, but I am not trying.  The area is 7 miles from Uconn Storrs campus.  I have two post Grad Students (age 25+) in their now. Great tenants for sure. @Kevin Siedlecki, thanks for keeping me in check. I might have been a little too sensitive the other day with @Brent Coombs. It's funny because those #'s I literally pulled (copy and pasted) from the actual BP Calculator.  SO when asked about the specifics, I really didn't delve into the differences between purchase cap rate, and cap rate.   You are correct in that valuation of $183k gives a 10 cap.  It isn't worth $183k IN ANY WAY, except for the income approach.  Meaning, if this asset were looked at as "commercial" (which it is not), the "value" would be $183k (resulting in a 10 cap, which is considered to be a decent rate of return in CT for most of us B&H investors) Make sense? My lesson of the day: Don't be sensitive when someone is asking questions :-) An sometime we learn more from being challenged, so thank you all for your input.  I am so grateful for BP and what  it allows us to learn, discuss, and inspire.