CoC VS Cap Rate

[Michelle Hagewood]

I'm seeking my first SFH investment in the Oakland country area (Michigan ).

I'm wondering if others in this market are content with analyzing 5% CoC or cap rate deals? I've put offers down so far in three properties and they have not been accepted when I have set my budget at where I can have positive cash flow and at least a 5% CoC return.

I am a cash buyer as well and trying to locate the markets where the 1% rule applies…and those markets seem to be the most at risk ones (Detroit, Pontiac, Flint). Not where I want to do my first investment.

Any tips on or explanation on CoC return or should I look more at cap rate since I'm investing cash?

Currently I'm considering a fixer in Lake Orion well below market value that needs work. And even with work and conservative budget projections (including high non homestead taxes) it's reaching the 4%-5% CoC return. But fixing it will bring tons of equity.

appreciate any and all kind :-) feedback. I’m a newbie. Don’t be too hard on me!