If it gives you good cash on cash returns, consider offering more and accept you can't refinance all your money out. 

Hello,Can anyone explain to me in what scenario would you use cash on cash return vs cap rate. 

This is in a new area, new agent, new contractor, new property manager.The returns would be over the 2% rule. 

@David HarleyIt is hard to opine on this without the context of market and property class/condition, but what I notice from the analysis is the CoC relative to loan amortization:  For a 25 year loan and $28k cash investment, demanding a return greater than 14% may be in your best interest.  

In return he wants a 50/50 split and wants me to convince the seller to "carry-back" 40% and not the current 70%...

Which places have highest return?

If you focus on those and are willing to take risks (risks are why real estate provide higher returns than the stock market), with the knowledge to back up your decision to take the risk, be ready to pull the trigger.Condos/Townhomes are great for hands off maintenance, but terrible as investments.

  $30K in gross annual rents before taxes, insurance, maintenance and vacancy allowance on a $600K asset is probably going to net you less than 2% annual return. 

Please note any unpaid preferred return will be accrued:Senior debtholderRepayment of capital and any accrued returns to meet the 9.0% preferred returnAt sale investors will receive their pro-rata share of 25.0% of the remaining profits

We choose the one loan method last time, as our equity portion on that loan grows faster and can be tapped into a bit more easily than doing that on say 3 different properties.