How Much Cash Flow Should Your Rental Properties Produce?

As a beginner, Taking less trade is actually more profitable than more. The more trades you take, the more your chances of losing increases.

I started renting out my first home when we moved into our second home. I’m making ok return ($800 month after all expenses) but the property value has increased significantly since I purchased. Trying to decide if I sell and invest or continue to rent. Would I base CoC on original down payment, mortgage payments, and improvements I put into it over the 10 years we lived in it?

To be a successful business owner and investor, you have to be emotionally neutral to winning and losing. Winning and losing are just part of the game. Risk comes from not knowing what you are doing.

Is it still possible to achieve that 12% cash on cash return in today’s interest environment where you’re going to pay a rate of at least 7%?

$100 monthly margins sounds terrible. A 11% CoC return would only be $11,000 out of pocket including repairs. Does this exist? Show me where to buy that house and I’ll sign tomorrow. That’s 10% down on a $110k loan before interest. And make sure it meets the 1% rule.

I understand the logic but i don’t understand it in practice. If I put down 40k and cash flow 2400/yr isn’t that only 6%

The stock market has averaged 6-7% a year over the last 100 years? Hmm

That 12% CoC after full mortgage and income tax is deducted?

Is everyone leveraging with cash out refis/home equity loans to get going/ funding additional properties ?

Question: if i get a loan to buy a rental property. Can i still get a second loan to buy another rental property?? Or do i have to wait until the first loan is done 10+ years??

I am starting my real estate knowledge from u

0$ made if property tax, insurance, replacement and remodeling would be 200$ a month which is illusional...

I bought a property with 2 houses on it for 35,000 and a net operating income of 19,600. Gross 21,600. Literally the best deal I have ever seen. I almost threw up when I found it.

Cash on cash return is the ONLY metric you should use!

One thing to remember cash on cash can increase over time. My first duplex only cash flowed 400 a month. With rent increases over a few years the cash flow is double. The rents were below market rate when I got the place as well

Realizing this is an old recording but say a $200 monthly cash flow & to generate a cash on cash ROI of 12% then we are talking about properties less than $250K? Your reply will be appreciated

Good video. I will say that $200 for a single family home is not really cash flow. Over the next 5 years that $12,500 return will likely go back into the house in maintenance. Whether it's a roof, a septic tank etc. It really needs to make $400-$500 to actually cash flow

I have two properties and going to add two more , need help to grow cash flow. I would be thankful if you could help me out

if you're accounting for all expenses appropriately, 12 percent coc is nearly impossible to find on the MLS in the current market.

Heads up. When you go to rent property taxs, insurance and so on go up. It eats any profit you think you might have.

What metric should I use if I'm buying a property with cash?

Spot on mate

How would $100-$200 even cover the maintenance or paint/repairs in between tenants? I understand you are building equity but when do you get to see some cash? You need 100 doors?!

Thank you im 13 years old my dad started doing these kinds of things. I think I want to follow along when I'm older also and I'm trying to read books now and watch videos about this business and it's starting to help me get the image into my mind of me doing it. just trying to learn early in my life!

So a $65k investment and your return is $15k is that a good return?

I like Maui - hope you and your family are enjoying! Been away from real estate for several years now, but...thoroughly enjoy you and your info and Bigger Pockets tools. I'll be back:-)

So what if your taking all your revenue from the rental and put it directly towards principal every month. Say $220,000 condo and rent+hoa is $1900 a month total positive cash flow is $3860. Is it wise to take the positive cash flow and pay it down?

This thread needs updated. The world is very different now. Personally, I have a $200 min

What leverage would you consider to get a 12% CoC

How much cash should you have set aside for repairs

Dumbest shit ever. That's chump changed. Your times worth more than that.

When he talks about aiming for a 15% cash on cash return. Is that in the the first year? Or accumulated over a certain amount of years? Thanks

Bought one for $110k...loan amount is 83k...renting it out for $1,350 and mortgage and everything is $905...rents are high so take advantage of em

Only $100? Y'all doing it wrong. Rent out each bedroom and make waaayyy more.

If you don’t revenue double your mortgage payment a month it’s not worth it

So good! Thank you for the video

I try to get enough to cover the depreciation in order to net my tax liability to 0. That way I pay no tax and keep 100% of the cash flow

Short and sweet

Hello,
I am looking to buy condo as an investment property and came across your videos. I found it really helpful.
The condo I am buying is 320k$ and I am putting 5% down and my total expense including HOA, Taxes, mortgage payment will be around 2300$ a month and I will be getting 2300$ rent every month. Can you please tell me if it is a good investment property?

What about SFR? What is your rule for CoC return

That’s why my goal when buying home is rent it. Just put down 3.5% and sell it after two years.

Is that including expenses like emergency repairs and broken appliances and things like that. That could wipe out profits

This has changed in 2021

I think these videos are probably great for someone who has gathered a bit of knowledge, but for someone like me most bigger pockets videos leave me still feeling overwhelmed and confused, like I'm missing something. Maybe it's bc I haven't done any deals yet but I'm at a loss for how to analyze deals to see if they're any good. If anyone has any suggestions on what to whach to explain deal analysis for beginners PLEEASE PEASE PLEASE 🙏🙏🙏 let me know, cause I'm struggling to understand the analysis part of everything

Fuck no

You’re awesome man. I found this looking for a how to for finding good markets to focus in on. The context is that I want to start investing out of state. Im in San Diego and the prices are crazy. I want to find a market to focus on over many years and many investments in order to get to know the place and leverage that knowledge to improve over time.

That’s the video I really would love to see. If it’s of interest to others and you too, walk through identifying a market to establish a foothold and build roots to leverage local knowledge and assets and contacts over 5 year to forever time period.

You da man Brandon.

Good information but you’re the second real estate professional I’ve heard this week say stock market only yields 6%-7% annually. The S&P 500 has generated an average annualized return of 10.9% over the past 50 years.

First time coming across your channel. I appreciate your input!

12%?!...You Americans....In Eastern Europe where I live, if you get a deal of 5.5% coc (or a gross yield of 5.5%/year) call yourself smart!
How in the world can you pay 100K (if you were to pay cash) for a property and then rent it for 1K a month?!?!?!?

Is this some undeveloped African country? How can the yield be so freakin' high?!?!?!?!


P.S. I cant understand how/why aren't most Americans financially free?! If this is the case, with a decent paying job, some frugal living and decently smart investments you should retire in 10 years since you start working (especially if you use leverage...which by the way...3.3 30-fixed loan mortgage rate....man...in my country is 6.5% fixed 5-year loan)

Me, buying a rental on Maui:
Also me: Now lives in Maui