BPers from their areas can chime in to verify but I read that the going cap rates in LA, NYC, and San Francisco are something like 2-3%, which would translate to the 0.2% rule/test!

It makes sense that the riskier you get as you approach non-performing notes, the wider the spreads will be, but even on relatively "safe" performing notes (first position, big equity, high FICO, well-seasoned payment history, etc.) my required returns are 50-100 bps above the offer price, which translates to 4-9% below ask (aka thousands of dollars).

Everyone is going to have there own criteria depending on their markets and individual goals.I usually know within 5 seconds of viewing a listing if it is worthwhile to do further due-diligence.My own qualifiers:- Purchase Price must translate to no more than $40K / Bedroom- Must be 3 or 4 unit apartment building- Monthly Rent Potential must be minimum of 1.25% of Purchase Price- Return on Invested Capital 20% when fully rented/renovated (debt service included)- Must be a minimum of C+ Neighborhood

Real estate would be infinitely easier if those pro-forma spreadsheets always translated to reality.

These were tough to translate into the RE world.

How does that translate in real life? 

Paying cash for an investment property translates to very low return on your money.Congrats, and good luck!

More cashflow then translates into a more valuable property based on the market cap rate.As for risk thats a reason we hold insurance policies and these are generally not homes we are living in but rather investments.

Definitely a viable concern that a lot of STR hosts that get hit with regulations and want to translate to MTRs are undergoing. 

With the new bonus depreciation, this translates into significant savings for a landlord.