So what do you consider a good cash flow deal? I was once taught that a good cash flow deal is when rents are 1% of purchase. So if a property rents for $1000, purchase must not exceed 100K. Does that kind of cash flow excite you? Want more articles like this? Create an account today to get BiggerPocket's best blog articles delivered to your inbox Sign up for free Let’s take a closer look. 5% Lender Cash Purchase Purchase $ 100,000 $ 100,000 Down Payment $ 25,000 $ 100,000 PITI $ (552) $ (150) Rents $ 1,000 $ 1,000 Expenses 30% $ 300 $ 300 Net Cash Flow $ 148 $ 550 Cash on Cash Return 7% 7% In this scenario assuming $150 for Tax & Insurance and 30% expenses, there is not much left over. Does a 7% return excite you? I believe a good cash flow deal is when rents are 1.5 – 3% of purchase. How about a deal with $3000 in rents for 100K? Rents are 3% of purchase. Is that possible, because that is some extraordinary cash flow? My friends, it is possible. Those are numbers from a deal we are working on right now, it is in a decent area and that isn’t even the best cash flow deal we have found. Today’s market has resulted in amazing opportunities and there are some markets that have really high returns. Let’s look at the numbers a little closer. 5% Lender Cash Purchase Purchase $ 100,000 $ 100,000 Down Payment $ 25,000 $ 100,000 PITI $ (552) $ (150) Rents $ 3,000 $ 3,000 Expenses 30% $ 900 $ 900 Net Cash Flow $ 1,548 $ 1,950 Cash on Cash Return 74% 23% Wow, look at that CASH FLOW!! Monthly Net Cash Flow is over $1500 per month and almost 2K if purchased with cash. A double digit cash on cash return is considered good, 74% is astronomical. It takes some digging to find these diamonds in the rough, but a few deals like that and you can start planning an early retirement. It will probably not surprise you to hear that my market is #2 for highest returns based on a recent article in Business Week. So, what kind of cash flow and returns are you getting in the markets you invest in?