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Updated almost 6 years ago,
High Cash Flow / Mediocre ROI = Good Deal?
BP Friends,
I'm looking at 5 single family new build homes as a bundle from a builder in Oklahoma. I would put 25% down at a 5% interest rate on a 30-yr fixed. I'm estimating the cash flow to be $530 per door conservatively. The ROI comes to about 9.45%. Brandon Turner says he targets 12% ROI. If the builder isn't willing to negotiate a better price is the cashflow for this property worth the sub-par ROI? Any tips to make these numbers better?
These homes are in a new development. They are going to be nice. There's a community pool and parks. A new highway is being built that will go through the town as well. I could potentially get up to $200 more per door, but want to be conservative when running these numbers.
Any advice is much appreciated. Thank you in advance.