BiggerPockets

Cash Flow Properties

Cash Flow properties are very attractive to people who want to own but need time to get their finances in order. Cash flow properties include:

Lease Options: You make minor repairs and then sell it to a buyer who rents it with an option to buy the property at a later date. All the while your collecting monthly rent payments that are slightly higher than your own carrying costs.

Sandwich Lease Option: Here you lease/option a property and then sublease it to a buyer who has an option to buy the property from you at a later date. Oftentimes, this renter is willing to make repairs themselves which increases the likelyhood that they will exercise their option to buy at a later date.

Seller Financing: Here you find, finance and sell a property. The difference is that you act like a bank for the buyer. The buyer makes monthly payments to you. You send the necessary amount to your own financing agent and keep any extra as monthly profit. Require the buyer to pay a slightly higher interest rate than what you are paying your own financing agent. The buyer will have to pay back the loan at a specific time or they can opt to refinance. You can also offer to sell them the property at a slightly higher amount than the fair market value.

Buy & Hold strategy are properties that generate monthly income (rent). Properties that are good are single family residences, multi-plex units, and land. If rents are dropping, consider using a different strategy.

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