Updated over 8 years ago on . Most recent reply
Analyzing Return With No Cash In Deal
I am curious as to how investors are evaluating their returns if they have no cash in a deal.
Example:
3bd/2bath
Purchase: $85k
ARV: $155k
Reno: $15k
The down payment/closing costs and reno cost me a total of $30k out of pocket. I was able to get a HELOC for $35k which allowed me to get all of my cash out. (Yes, this was a HELOC on an investment property. PENFED does them until you own more than 4 properties. )
My cash flow after all expenses (piti, capex, vacancy, etc…) is $400/mth. Evaluating a COC return seems impossible to me since I have none of my own cash in the deal. Am I thinking about this all wrong? How should I be evaluating my return in this situation?