I think we are basically in agreement - Posted by Sean
Posted by Sean on May 13, 1999 at 15:18:24:
I’m not knocking the value of comps. People who wish to flip, rehab, etc. need good comps and good due diligence. A person who has gotten good comps on a property has done a good thing and is well ahead of someone who hasn’t done comps.
On the other hand, if you plan to buy and hold a property you need a good cap rate. Others have suggested here that a good cash on cash return is also necessary. I certainly would not object to a good cash-on-cash return.
Most businesses fail not because of lack of profitability but because of cash flow problems. This occurs often when a business is getting paid in 45-60 days and they have to pay their vendors in 30 days (or C.O.D.) and they don’t have the cash to do so. So cash flow is very important!