Pro Forma Evaluation

Category: BRRRR

1 replies

Original post

We have a pretty decent pro forma that we use when evaluating new investment opportunities, but I'm curious what per unit cash flow do most investors use when deciding if a new property is good? I've heard $200 / door, but we've always been more conservative than that. Are others the same?

Reply by Ken Garrett

I shoot for $300/door, but there are variables with this. Mortgage pay down, property taxes and appreciation should factor into this as well. It’s not a one number analysis person. I also look at cash on cash return. I like to see 20% or better. If you can get a great BRRRR, it should be very high. Close to 80%-100%. It is difficult to pull 100% out. That is why I look at CoC. You can also calculate IRR and or cash on equity. I like to use multiple metrics.