Learning the metrics

[Marc S.]

If I was to purchase a property all cash, I would assume using the CoC metric would be void, if that's the case, what would be my next best metric to use to help determine if the deal was profitable and good?

Also, is it usually frowned upon to pay all cash for a house when the ole verbiage is, use other peoples money (i.e., banks, lenders, etc) to make money?

Thank you!

[Jonathan Oh]

@Marc S. I'd also add it's not all about CoC, but how the neighborhood is and how the property will perform overtime. CoC just gauges how the property will do today. Are there positive things happening in the local economy? Opportunities to increase rent? What condition is property in? Are there capex items that you'll need to cover in coming years? These are things to consider that will affect your cashflow over time.

And IMO, if you're not planning on living off your rental income anytime soon, then the goal should be to acquire as many assets with as little down as possible and spread your risk over multiple properties. This means no cash purchase. Hope this helps!