Should there be a minimum proft per unit?

[James Mills]

Greetings! I am entirely new to BP and to real estate investing. I've been lurking around the blogs and forums for a while, and have read the getting started guide, and several dozen of the blogs on this site. I'm REALLY looking forward to getting into the game!

I've mostly been looking at fourplexes. I have a question about fourplexes in general (though I have one in mind to which my question specifically applies). Should I look to have a "minimum expected profit" per unit?

One of the properties I ran cashflows on seems initially attractive -- 12.6% cap rate (and 28.9% CCR assuming 75 LTV / 30yr fixed rate loan / 6.0% interest, 50% expense ratio, and assumed rent 12% below rentometer.com's median rent for the area in which the fourplex is located (monthly assumed rent is 2.11% of purchase price)).

Though my projected return ratios are attractive (12.6% and 28.9%) on this property, I'm not sure if the magnitude of the return is large enough. Given the numbers above, the expected cash flow from this property is $458.26/mo. That means an (expected) cash flow of $114.56 per unit. I've read one on of the blogs here that someone preferred/suggested a profit of at least $200/month/unit. One $450 repair could blow out the profits from a month (and that's assuming all four units are occupied).

IF the cap rate / CCR were to pan out according to my projections, those financial ratios look good. However, is the "$200 profit/month/unit" a general real estate investing rule that I should apply when running cash flows, or is such a rule of thumb more a matter of personal investor preference?