@Gabriel L. the most often guidance I've read about, received or experienced is that, for real estate investments, you would want to be roughly 8-12% (or higher). We usually don't target deals if the ROI is less than 10%, that just our personal preference. ROI is essentially the amount of return you will get on an annual basis and you can use it to determine the amount of time it will take you to recoupe your upfront investment costs. In it's most simplistic form, a COC ROI of 20% means that you will recoupe 20% of your upfront investment costs each year so it will take you ~5 years to recoup 100% of your investment (100%/20% = 5).
The way to think about what would be an acceptable COC ROI in real estate: the stock market, on average, generates a return of 5-7% annually so if you're going to invest the amount of time in resources it takes to be a real estate investor, you want to make it worth your while and generate a better return than the stock market. That's where the 8-12% rule of thumb originates. If you aren't generating at least better than stocks, you might as well invest in stocks. Of course there are many other factors to consider like risk - in my opinion stock market is higher risk than real estate rentals.
There are many, many varying factors in real estate so sometimes a 5% ROI real estate deal can be attractive while a 15% ROI may not. These are not hard and fast rules, more like "rules of thumb" to use as a guide to question and dig deeper when a deal doesn't seem right. Deals in markets like SF or LA can tend to be low on the cash flow, which means the COC ROI will be low or sometimes negative but that doesn't stop thousands of investors from pursuing deals each month. These investors tend to chase appreciation and not cash flow.
For your situation, you should make sure you are cash flow positive but what is your analysis telling you about the potential cash flow of the prospective property?
