.* Purchase & Rehab *Purchase Price: $105,000 ($80.1/sq. ft.)After Repair Value: $125,000Purchase Costs: $1,050Rehab Costs: $0 ($15,000 Rolled into loan)Down Payment: $21,000Total Cash Needed: $22,050* Financing *Loan Type: AmortizingLoan Amount: $84,000Loan to Value: 80%Loan Term: 30 YearsInterest Rate: 5.5%Monthly Payment: $477* Cash Flow (Monthly) *Rent: $1,250Vacancy: -$125 (10%)Expenses: -$500 (40%)NOI: $625Mortgage Payment: -$477Cash Flow: $148* Returns & Ratios *Cap Rate (Purchase Price): 7.1%Cap Rate (Market Value): 6%Cash on Cash Return: 8.1%Return on Equity: 4.2%Return on Investment: 65.1%Internal Rate of Return: 65.1%Rent to Value: 1.2%Gross Rent Multiplier: 7Debt Coverage Ratio: 1.3

Unfortunately she sort of melted into her mattress and then flies multiplied which basically covered the bedroom walls.

Setup cost $1k/month, + lease $3k/month, plus insurance $1,250/month, plus utilities $350/month, plus maintenance $150/month, etc, = $5,750 expected outflow/monthThen take expected income $7,500, subtract expected outflow of $5,750 = $1,750/month expected incomMultiply $1,750 times lease months (36) to get gross expected profit ($63,000) and subtract setup cost to get net expected profit ($63k-$36k) = $27k To get total ROI multiply monthly expected expenses by lease term, add setup cost, then divide  gross expected profit by the result (($5,750*36)+$36k) = $243,000 ROI $63000/$243,000 = ~26% or ~9%/year. 

I've been doing hours of research in to Florida, and now that insurance costs may multiply there aren't any deals I am finding.

Additionally, investors are increasingly using valuation metrics (such as cap rate, gross rent multiplier) to price real estate, which would lead one to believe that Midwest/Southern real estate is a safer bet than the coasts.

@Michael Macaluso thats 24% cash on cash... not gonna happen if you want it truly passive unless you multiply your principal a few times.Perhaps flipping some properties can turn 100k into 300-400k.

The tradeoff could be less appreciation than residential assets.Right now we’re working with a short term rental fund that is seeing 9% in cash flow, meaning to get to $100,000 in passive cash flow there you’d only need to invest $1.1M instead of $1.43M.Here’s a breakdown of how a greater cash return can greatly lower the time needed to achieve $100,000 in passive cash flow:7% - 100.000 / .07 = $1.43M8% - 100.000 / .08 = $1.25M9% - 100.000 / .09 = $1.11M10% - 100.000 / .10 = $1M11% - 100.000 / .11 = $900K12% - 100.000 / .12 = $833KThe first step to getting $100,000 in passive cash flow is to determine the cash return you’re looking to get in your investments, then take $100,000 and divide it by that percentage.Whatever number you get, don’t worry about investing that amount from day 1, look for shorter term investments that have higher appreciation and equity multiples for you to start out with so you can get on a path to multiply your money enough times until you achieve the amount you need to have the passive cash flow you’re looking for.

  (1-22%) = .88, now multiply this against your mortgage rate & you have your After Tax mortgage rate. 

However, absolute returns will almost certainly be subpar to real estate simply due to the force multiplier of leverage and the tax benefits.

So the current industry multiplier for the hotel & recreation industry around 10.51 EV/EBITDA.