All Forum Posts by: Anthony Arender

I would not recommend bending your investment strategy to the market.

8% CoC with 75% leverage is a reasonable metric. You don't need to go below that and frankly, I wouldn't recommend it unless you have adequate reserves and income to withstand property issues and market cycles.

Jim is right about not adjusting your needs to the market. Your just negotiating against yourself and rationalizing that you ended up with a good deal...which you won't.
The problem with CoCReturn is it only applies to the first year. Although the return in the first year is important, it doesn't mean every year will have that same return. What's most important is how many years it will take to get your cost/cash (DP) back to you. This is when you start to make a profit...the faster the better.

Thanks for the advice. What is a good rule of thumb on how many years before I get my original cash investment back?

I want to see it back in my hands within 5 years max...so I can take advantage of the appreciation and sell before I start losing money and to exponentially gain with my money. Another reason for 5 years is that's when you start seeing those pesky/expensive CAPEX events that steal the CF that you've made previously.

So just to be clear, when you analyze a deal, you are looking at whether the cash flow alone is going to replace your initial cash investment within 5 years?

Yes. What else would there be to replace it? Equity isn't cash. Equity is a separate issue/return.

So correct me if I'm wrong. Jim says 8% CoC is reasonable. You say 20% is your minimum. Jim is in for the long haul and you are going to exit in 5 years. Does this explain the wide difference in the desired CoC?

0 Votes

Quote from @Joe Villeneuve:

Quote from @Anthony Arender:

Quote from @Joe Villeneuve:

Quote from @Anthony Arender:

Quote from @Joe Villeneuve:

Quote from @Jim Kittridge:

Thanks for the advice. What is a good rule of thumb on how many years before I get my original cash investment back?

So just to be clear, when you analyze a deal, you are looking at whether the cash flow alone is going to replace your initial cash investment within 5 years?

Yes. What else would there be to replace it? Equity isn't cash. Equity is a separate issue/return.

Jim says 8% CoC is a reasonable expectation, you're saying 20% is your minimum. What am I missing?

0 Votes

Quote from @Joe Villeneuve:

Quote from @Anthony Arender:

Quote from @Joe Villeneuve:

Quote from @Jim Kittridge:

Thanks for the advice. What is a good rule of thumb on how many years before I get my original cash investment back?

So just to be clear, when you analyze a deal, you are looking at whether the cash flow alone is going to replace your initial cash investment within 5 years?

0 Votes

Quote from @Joe Villeneuve:

Quote from @Anthony Arender:

Quote from @Joe Villeneuve:

Quote from @Jim Kittridge:

Thanks for the advice. What is a good rule of thumb on how many years before I get my original cash investment back?

0 Votes

Quote from @Joe Villeneuve:

Quote from @Jim Kittridge:

Thanks for the advice. What is a good rule of thumb on how many years before I get my original cash investment back?

0 Votes

I invest in the Northern Kentucky market, across the river from Cincinnati. It is next to impossible to find decent properties that cash flow for an 8% coc. Should I settle for less in order to get my cash out of the bank and into a property before rates go up, even if it is only at a 3% coc? Or wait for a dip? Some guidance here would be appreciated from investors with more experience than I have.

1 Vote

All Forum Posts by: Anthony Arender

Anthony Arender has started 1 posts and replied 6 times.

Post: Cash on Cash Expectations

Post: Cash on Cash Expectations

Post: Cash on Cash Expectations

Post: Cash on Cash Expectations

Post: Cash on Cash Expectations

Post: Cash on Cash Expectations