All Forum Posts by: Douglas Johnson

In beginning my real estate investing journey I have been spending time looking at listings and trying to work out what my criteria should be for pulling the trigger on an investment property. For example having an IRR of over X percent or a cap rate of over X percent. I am curious about what metrics everyone else uses to figure out what makes something a deal for them. I would really appreciate it if some of you could share your personal metrics or criteria for properties you invest in.

Thanks for the response Logan, that all makes sense to me. I just wanted to make sure I wasn't crazy and botching the math or not looking in the right places. Ultimately these deals still have good IRR's that outperform the stock market if you can wait 10 or so years but having that negative cashflow makes them much harder to support with a smaller W2 income.

Hi all, I am a resident of Salt Lake City and I am going through major listing sites trying to analyze deals while I save up and increase my earning potential in order to invest in real estate in a few years. In my research I am focusing on house hacks for multifamily properties. The best listing I came across was a 4-plex for 985k with a cap rate of 5%, IRR of 10% after 20 years, and a cashflow of -1.7k a month assuming an FHA loan with 3.5% down @ 6.5% interest and rents of 1350/month. This is including the rent from the 4th unit even though I would be living there so in actuality the situation would be even worse.

I keep hearing stories on the podcast of people living in house hacks that are cashflow neutral or even positives with insane cap rates and IRR. Do people just invest in properties like this with the hope of rapid appreciation?

If anyone could chime in and let me know if this deal is good or not or give any personal anecdotes about any investments they have made with large negative cash flow I would greatly appreciate it. 

For additional context I am looking at 413 E Herbert Ave. Salt Lake City, UT 84111 and using the rental property calculator on calculator.net