Working The Spread
Good Morning fellow REI's.
I was just wondering in my infancy to this game. What are you all comfortable with as far as a spread when you look at new properties. I have a SFH I am looking at and my spread looks like about:250-300 per month when I run the numbers . Do you all feel that is a bit thin?
Many thanks
Brian[ Edited by Brill on Date 10/29/2003 ]
If monthly cash flow, maybe not but it would depend upon the IRR.
If annual cash flow, maybe, but going forward would depend upon the initial investment, the equity going into the property, the appreciation prospects for the property, and other factors related to your personal financial situation.
You don't provide enough information to give you an informed answer.
Generically, I'd say that $300 is around I what I average on my mid range properties (~140K). Some I make more and some less, depending on the situation.[ Edited by SavvyYoungster on Date 10/29/2003 ]
In order to provide a real answer, more information needs to be provided. What is the property rented at? What are your operating costs? What is your PITI? What rate of return are you looking to acquire? How much did you put down on the property?
Phil
Sorry Dave asomtimes when I'm writing I just assume like everyone should have already known what was going on in my head. I updated the post to reflect that amount as monthly cash flow. It is after subtracting mortgage,insurance,Taxes,management and vacancy rate. The intial ROI is 48.18% based on 10% down on a 66000 dollar loan.
Thanks Bri
I would say good enough.
Roi of 48% should be a no brainer.