Hi All,I am starting to get some interest from family with respect to leveraging some of their cash on deals to increase the rate of return they are seeing with their other investments.

I've had friends-of-friends that flip in Beloit and have only seen a good return (by their own definitions) when purchasing foreclosures away from the downtown area, and using only trusted contractors (not necessarily choosing the cheapest bids).

However, instead of calling they decided to show up Memorial Day weekend and complete the work on our primary house and then they went to the rental ans climbed onto the roof ans got right to work.

And if they do indeed take a loan where they are not able to mitigate risk or a non-QM loan, you better believe they are going to want something in return for that. 

If I were you, id high ball everything , sounds like major damage to this house     maybe shoot for 60k rehab, high points on the hard money..... even if you buy cash at 30k +60k + hard money fees + closing costs ... you might be able to squeeze a 10 percent return out ..... if you have good contacts id say maybe It could work ... if you have only done this a couple times , maybe pass on this for something with a quicker turnaround time 

What you're stating at 11.8% is the return on investment not cap rate.

While I suppose your cash on cash return is infinite, how does the property cash flow with the payments from a loan of this nature?

@Raheim Binnie I have been investing in Detroit (specifically West side for 16 years) happy to help investors navigate our market and make some of the best returns in the world on real estate.

The difference is your Equity or Net Worth.If you want to maximize wealth-building you need to get the maximum return on your equity.

You'll want a good cash on cash return to compensate for that money being temporarily pulled from the market.