What ROI are investors looking for when investing in the US?

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Precisepm

New Member
What ROI are investors looking for when investing in the US?
 
Ryan M

Ryan M

New Member
I think your question is ambiguous.Every investor is out to make some profit unless you intend to ask something and we are not getting it.
 
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Precisepm

New Member
Thanks wealthywithlove, that helps!

Ryan It's clear that every investor is out to make a profit. Are they more interested in flips, or turnkey properties? It seems like a lot of investors from out of the Country are typically interested in turnkey properties, but local investors are more so interested in flips.
 
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speedy gonzales

New Member
It still doesn't matter whether your out of country or not....investing is still a personal thing with investors having different objectives.

I know a lot of Australian's are buying and holding US real estate. Two methods I see are those that buy direct from the banks, carry out a refurb and lease them to tenants themselves. The others buy direct from turn key operators and see a convenience in buying a home that is already refurbished and in most cases come with leases already in place. Don't know of many who buy & flip
 
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investor911

Banned
if banks are offering 1 percent or less, most investorsw ould be happy with id say 8% or higher...me personally, 10% or higher is good.
 
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HFCFI

New Member
Ten to Twenty Percent

That's a very good question but one that has a lot of different angles. The general idea is that the cap rate on the property is the property's ability to generate income but your ROI will be greater or less depending on the financing that you put on that very same property. If you're positively leveraged, meaning that your interest rate is lower than your cap rate, then your ROI will go up. If you are negatively leveraged, meaning that your cap rate is lower than your interest rate, then the more money you borrow, the lower your return on investment goes. So to answer in general I would say that investors who are looking at houses in America are generally looking at between the 6 - 10 cap rate for houses. Usually, the lower the cap rate, the nicer the property. It'll be newer, located in more urban or populated environment that is closer to jobs. Higher cap rate properties will usually be older and in more rural markets, or maybe they are more distressed type of sales situations. So when you're working with a 6-10 cap rate, your ROI could be much higher or much lower depending on what your financing looks like and how much money down you have put into a property. If you are buying a property with very little money down and you are positively arbitraged, you could have an enormous ROI. It's possible that you could get 50, 60 or even 100 percent annualized return on investment if you've got very high leverage on a positively arbitraged house. Also you could have a very low ROI if you've got no leverage or very upside-down leverage on a house that is costing you more in interest than what your earnings are in cash flow from the property. So generally, conservative investors in America are looking for ten to twenty percent return for their houses and I think you can actually generate a higher return on investment depending on the deal structure that you put together.
 
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owendale

New Member
HFCFI said:
That's a very good question but one that has a lot of different angles. The general idea is that the cap rate on the property is the property's ability to generate income but your ROI will be greater or less depending on the financing that you put on that very same property. If you're positively leveraged, meaning that your interest rate is lower than your cap rate, then your ROI will go up. If you are negatively leveraged, meaning that your cap rate is lower than your interest rate, then the more money you borrow, the lower your return on investment goes. So to answer in general I would say that investors who are looking at houses in America are generally looking at between the 6 - 10 cap rate for houses. Usually, the lower the cap rate, the nicer the property. It'll be newer, located in more urban or populated environment that is closer to jobs. Higher cap rate properties will usually be older and in more rural markets, or maybe they are more distressed type of sales situations. So when you're working with a 6-10 cap rate, your ROI could be much higher or much lower depending on what your financing looks like and how much money down you have put into a property. If you are buying a property with very little money down and you are positively arbitraged, you could have an enormous ROI. It's possible that you could get 50, 60 or even 100 percent annualized return on investment if you've got very high leverage on a positively arbitraged house. Also you could have a very low ROI if you've got no leverage or very upside-down leverage on a house that is costing you more in interest than what your earnings are in cash flow from the property. So generally, conservative investors in America are looking for ten to twenty percent return for their houses and I think you can actually generate a higher return on investment depending on the deal structure that you put together.
So 10 to 20 %. As a realtor your comments are really interesting .thanks Interesting to hear from more people .. ROI. LTV %yield cash flow analysis .. What do others think?
 
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