All Forum Posts by: E. C. "Stony" Stonebraker

I'm a new investor in the Miami area and am trying to get a feel for the market here in different neighborhoods.  What are some reasonable rents/expense ratios/cap rates, net cash flows per unit, etc. in different South Florida neighborhoods?  Everyone tells me the market is a sellers market these days so good deals are difficult.  Any positive cash flow opportunities here?

Great idea, David!  Thanks for the tip.

Both responses make sense to me and I appreciate your thoughts.  A return on $ should be based on the actual outlay, IMO, and consistency between similar investments in the same market also is essential.  Thank you to both!

I read the 2010 article by J Scott titled "An Introduction to Real Estate Investment Deal Analysis" and I'm also reading the book "The ABCs of Real Estate Investing..." by Ken McElroy.  The two sources calculate Cap Rate and Cash on Cash Return differently.

Cap Rate by Scott is NOI / (Purchase Price + Improvements + Closing Costs)

Cap Rate by McElroy is NOI / Purchase Price.

Cash on Cash Return by Scott is Cash Flow / (Down Payment + Improvements + Closing Costs)

Cash on Cash Return by McElroy is Cash Flow / Down Payment.

Which is the preferred calculation?  Does it depend on flipping vs Buy and Hold?