How to retire off Cash Flow

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How to retire off Cash Flow

Claude Vargas
Member since 2022 · 2 posts · 5 votes

Hey BiggerPockets! I just joined the group yesterday after looking into real estate investing for the past 8 months. My goal is to eventually earn $10k-$12k per month off cash flow, and have been trying to find my first rental property investment.

I am currently preapproved for a conventional loan in Texas and looked for single family homes in both Dallas and Houston, but it’s been difficult trying to find a property that cash flows $300-$500 per unit. After looking for a few months now, I started hearing Ohio is a great market and am starting to look there.

It would be awesome if anyone can share their thoughts on how they’ve grown their portfolio or share any advice on how to start hunting for the right deals! 


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Bill F.
Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes
4y

12 posts in this thread, five of them recommend investing in Ohio, hmmmm either Ohio is diamond in the proverbial RE rough or I've missed something. 

Oh wait, all five of the posts recommending Ohio come from.... Agents who work in... OHIO!!! Four of them at the same brokerage.   They even upvote each other's posts. What kind and caring co-workers reafco hires. 

@Remington Lyman, @Austin McClain, @Brandon Goldsmith, or @Patrick Drury

What trends, demographic, governmental, socioeconomic, or other, do you see in Ohio that will lead OP to get a high enough total return relative to what he'd get in TX that justifies the risk of investing 1,000 miles away in a market he has no experience, knowledge, or network?

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  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    4y
    Quote from @Claude Vargas:

    Hey BiggerPockets! I just joined the group yesterday after looking into real estate investing for the past 8 months. My goal is to eventually earn $10k-$12k per month off cash flow, and have been trying to find my first rental property investment.

    I am currently preapproved for a conventional loan in Texas and looked for single family homes in both Dallas and Houston, but it’s been difficult trying to find a property that cash flows $300-$500 per unit. After looking for a few months now, I started hearing Ohio is a great market and am starting to look there.

    It would be awesome if anyone can share their thoughts on how they’ve grown their portfolio or share any advice on how to start hunting for the right deals! 



    I recommend you read this article on OOS investing. It explains the importance of creating your core four. You will need to get a local, rockstar Realtor, contractor, lender, and property manager.

    https://www.biggerpockets.com/...

    I invest locally in Columbus, Ohio
    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
    Reafco512 Reviews
    WebsiteView Page
    4Reply
  • Eliott Elias
    Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
    4y

    There are properties that cash flow in Texas, what areas have you been looking in? If your goal is to earn 10k in passive income and each property cash flows $300 you will need to own 33 properties to reach your freedom number 

    5Reply
  • Cody L.
    Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
    4y

    I'm not afraid of suggesting out of state.  But if you're in texas, you're were most (a lot of) people come to with their out of state dollars.   Take less cash flow and buy local.  You'll be glad you did.

    I'm 100% in Houston TX and still buy all the time.  Might be hard to make #'s work but it's not in multi if you know your submarkets. 

    2Reply
  • Karl McGarvey
    Real Estate Agent · Houston, TX · Member since 2019 · 763 posts · 500 votes
    4y
    Quote from @Claude Vargas:

    Hey BiggerPockets! I just joined the group yesterday after looking into real estate investing for the past 8 months. My goal is to eventually earn $10k-$12k per month off cash flow, and have been trying to find my first rental property investment.

    I am currently preapproved for a conventional loan in Texas and looked for single family homes in both Dallas and Houston, but it’s been difficult trying to find a property that cash flows $300-$500 per unit. After looking for a few months now, I started hearing Ohio is a great market and am starting to look there.

    It would be awesome if anyone can share their thoughts on how they’ve grown their portfolio or share any advice on how to start hunting for the right deals! 



     With prices and the market the way they are not, $300-500 may be tough, but I think the right thing to do now is play the long game. Find a property now that is "easy" to manage and causes you minor headaches knowing that in 10 years with appreciation both on sales and rental income the property, which may be only a base hit today, will become a home run for you over time. There are a lot of great places in Houston to invest with quality tenant markets that will provide you with an asset over 10-15 years that you will be very glad you invested in.

    4Reply
  • Austin McClainBusiness Member
    Real Estate Agent · OH · Member since 2021 · 347 posts · 602 votes
    4y

    Ohio is a good market to start in. Cities like Cleveland and Toledo have high cash flow and lower purchase prices. In Columbus, there is less cash flow but higher appreciation rates. 

    [email protected]614-710-4827
    7Reply
  • Brandon GoldsmithBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2020 · 1k+ posts · 1k+ votes
    4y

    There is definitely still a lot of opportunity in Ohio for cashflow. Some of the markets are better than others for it. @Claude Vargas

    [email protected]614-963-3340
    2Reply
  • Nicholas MischPro Member
    Investor · Broadview Hts, OH · Member since 2016 · 310 posts · 280 votes
    4y
    Quote from @Remington Lyman:
    Quote from @Claude Vargas:

    Hey BiggerPockets! I just joined the group yesterday after looking into real estate investing for the past 8 months. My goal is to eventually earn $10k-$12k per month off cash flow, and have been trying to find my first rental property investment.

    I am currently preapproved for a conventional loan in Texas and looked for single family homes in both Dallas and Houston, but it’s been difficult trying to find a property that cash flows $300-$500 per unit. After looking for a few months now, I started hearing Ohio is a great market and am starting to look there.

    It would be awesome if anyone can share their thoughts on how they’ve grown their portfolio or share any advice on how to start hunting for the right deals! 



    I recommend you read this article on OOS investing. It explains the importance of creating your core four. You will need to get a local, rockstar Realtor, contractor, lender, and property manager.

    https://www.biggerpockets.com/...

    I invest locally in Columbus, Ohio
    Remington has it right. Columbus and Cleveland both have great cash flow opportunities. 
    1Reply
  • Account Closed
    Investor · Leander, TX · Member since 2016 · 296 posts · 402 votes
    4y

    Just be aware that with the cheaper homes, that are older, come with higher insurance premiums, not to mention more headaches in terms of repair and maintenance costs, and in some cases higher turnover rates, as well as a modest appreciation.

    5Reply
  • Evan Polaski
    Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    4y

    @Claude Vargas, real estate, like all investments is a balance of risk. In general, if you plan on holding long term, and creating stable income over the long term. You do not want to invest in "high cashflow areas", which is a euphemism for crappy areas. Yes, Cincinnati, Toledo, Columbus will create better cash flow than major metros in CA, but to get 300-500/door you are either buying that cash flow with very large down payment, taking on a lot of risk in area and tenants, and/or creating that cash flow by deferring a lot of Capex.

    For reference on the last point, I bought a property in 2012 for $20k, 15k to get rent ready, 850/mo starting out. All was great.  Raised rents a few times to $1030/mo.  Tenant moved out last fall, had to put in $90k full gut rehab.  Some of this was voluntary, and am getting $1800/mo now with no deferred maintenance, NOW.  But that renovation took literally every dollar of GROSS RENT I had made over the last 10 years, not including the roof from a few years ago, water heaters, turnover expense, repairs, appliance replacements, insurance, etc.

    9Reply
  • Patrick DruryBusiness Member
    Real Estate Agent · Columbus, OH & Cleveland OH · Member since 2021 · 1k+ posts · 2k+ votes
    4y

    @Claude Vargas
    I recommend you look at multi-family. You are going to have better cash flow with multifamily than you would with single families. As for markets, I would recommend you look into Columbus OH. It's a solid hybrid of Cashflow and appreciation. I live and invest locally in Columbus. 

    [email protected]614-412-4565
    Reafco-555 Reviews
    View Page
    2Reply
  • Pat Hadley
    Member since 2022 · 1 post · 0 votes
    4y
    agreed!! Never underestimate the power of being able to physically check on your property.  Very helpful!

    Quote from @Cody L.:

    I'm not afraid of suggesting out of state.  But if you're in texas, you're were most (a lot of) people come to with their out of state dollars.   Take less cash flow and buy local.  You'll be glad you did.

    I'm 100% in Houston TX and still buy all the time.  Might be hard to make #'s work but it's not in multi if you know your submarkets. 


    0Reply
  • Dwayne Poster
    Investor · Van Isle · Member since 2021 · 455 posts · 226 votes
    4y

    realestate is really no different than money, in that 'time' is a necessary component. You look for deals that season well with time. Door count alone is missing the time factor. 

    3Reply
  • Bill F.
    Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes
    4y

    12 posts in this thread, five of them recommend investing in Ohio, hmmmm either Ohio is diamond in the proverbial RE rough or I've missed something. 

    Oh wait, all five of the posts recommending Ohio come from.... Agents who work in... OHIO!!! Four of them at the same brokerage.   They even upvote each other's posts. What kind and caring co-workers reafco hires. 

    @Remington Lyman, @Austin McClain, @Brandon Goldsmith, or @Patrick Drury

    What trends, demographic, governmental, socioeconomic, or other, do you see in Ohio that will lead OP to get a high enough total return relative to what he'd get in TX that justifies the risk of investing 1,000 miles away in a market he has no experience, knowledge, or network?

    20Reply
  • Jon Martin
    Member since 2022 · 1k+ posts · 1k+ votes
    4y

    One strategy I've thought about for my 2-3 year plan is to buy a multi in a market with both STR and LTR potential. Takes some research but doable. Deck out the best unit as your STR and keep the others at long term for the regular cash flow. Transition the other units into STRs as the tenants move out and you have the cash to rehab and furnish.

    1Reply
  • Account Closed
    Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes
    4y

    @Claude Vargas very few people will ever generate enough cash flow on leveraged properties to live off the proceeds. You buy a few good houses that generate 1 to 2k pwr month after expenses and pay off the mortgage as fast as you can. Thats how you do it.

    4Reply
  • Joseph Cornwell
    Real Estate Agent · Cincinnati, OH · Member since 2015 · 474 posts · 580 votes
    4y

    @Claude Vargas I started with a cash flow goal in 2015 of 4k per month (that was my net pay from my w-2 job at the time), I passed that last year and continue growing my portfolio, my next goal is 10k/mo in net cash flow. I did it by buying 1-2 properties a year and scaling up each year by rolling my extra income and cash flow into new deals. I also mainly do BRRRR deals where I can get out most of my capital and roll it into another deal to help me scale faster. I invest in Cincinnati, if you have any questions about my market, feel free to reach out! Best of luck on your journey!

    2Reply
  • Evan Polaski
    Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    4y

    @Joseph Cornwell, you bring up a good point.  Meaning it took you 7 yrs to build up to $4k/month.  I think most people think in terms of cash flow, which is understandable.  "I want to make 10k/mo"...  What people don't think about, as much is what that really means.  Hitting 10% cash on cash returns in this market is pretty challenging without a lot of risk, either through super high leverage or major tenant and area risk.  

    All told, it is totally possible to build a portfolio of assets to generate a healthy income. But with this income comes work.  Owning 40+ units, or even 10 units, is hardly passive.  Even with a manager, owning property still involves bookkeeping, decision making and constant problem solving.  The upside is, you don't have show to an office everyday, but the downside is issues arise when you are on vacation, sitting down for dinner with family, and any other inconvenient time you can think of.

    4Reply
  • Joseph Cornwell
    Real Estate Agent · Cincinnati, OH · Member since 2015 · 474 posts · 580 votes
    4y
    Quote from @Evan Polaski:

    @Joseph Cornwell, you bring up a good point.  Meaning it took you 7 yrs to build up to $4k/month.  I think most people think in terms of cash flow, which is understandable.  "I want to make 10k/mo"...  What people don't think about, as much is what that really means.  Hitting 10% cash on cash returns in this market is pretty challenging without a lot of risk, either through super high leverage or major tenant and area risk.  

    All told, it is totally possible to build a portfolio of assets to generate a healthy income. But with this income comes work.  Owning 40+ units, or even 10 units, is hardly passive.  Even with a manager, owning property still involves bookkeeping, decision making and constant problem solving.  The upside is, you don't have show to an office everyday, but the downside is issues arise when you are on vacation, sitting down for dinner with family, and any other inconvenient time you can think of.

    I didn't buy until 2017, I spent almost two years saving capital and educating myself before I felt ready to pull the trigger, so it took about 4.5 years in total to hit my cash flow goal. While it is not totally passive, I do have an assistant who handles my leasing, my tenant calls, schedules maintenance, etc. My actual time managing my portfolio is very minimal, I use that extra time to focus on building my businesses now that I have retired from my W-2 job. So depending on how much time someone wants or is willing to spend, they could probably net 4k/mo in cash flow much faster than I did, but I tried to build it out very passively. 

    0Reply
  • Dom Battezzato
    Rental Property Investor · SAN DIEGO · Member since 2022 · 90 posts · 42 votes
    4y

    Hi Claude, 

    What are the cash on cash returns you are finding in the Texas market? 

    Also, how far out until you want to produce 10k-12k a month in cash flow?  

    Thanks! 

    0Reply
  • Claude Vargas
    OP
    Member since 2022 · 2 posts · 5 votes
    4y
    Quote from @Dom Battezzato:

    Hi Claude, 

    What are the cash on cash returns you are finding in the Texas market? 

    Also, how far out until you want to produce 10k-12k a month in cash flow?  

    Thanks! 


     Hey Dom! In Dallas, mainly breaking even but it Houston, seeing some deals here and there. Anywhere from $100-$400 per unit, but most buyers are willing to bid over asking price by $20k+

    I'm going to aim to reach this goal within the next 10 years. I know people owned multiple units within a span of a few years, so It's possible. Just have to get started and stay eager. 

    0Reply
  • Steven Foster Wilson
    Rental Property Investor · Columbus, OH · Member since 2017 · 3k+ posts · 3k+ votes
    4y
    Quote from @Remington Lyman:
    Quote from @Claude Vargas:

    Hey BiggerPockets! I just joined the group yesterday after looking into real estate investing for the past 8 months. My goal is to eventually earn $10k-$12k per month off cash flow, and have been trying to find my first rental property investment.

    I am currently preapproved for a conventional loan in Texas and looked for single family homes in both Dallas and Houston, but it’s been difficult trying to find a property that cash flows $300-$500 per unit. After looking for a few months now, I started hearing Ohio is a great market and am starting to look there.

    It would be awesome if anyone can share their thoughts on how they’ve grown their portfolio or share any advice on how to start hunting for the right deals! 



    I recommend you read this article on OOS investing. It explains the importance of creating your core four. You will need to get a local, rockstar Realtor, contractor, lender, and property manager.

    https://www.biggerpockets.com/...

    I invest locally in Columbus, Ohio

     I agree Ohio has incredible real estate opportunities. 

    I recommend the major cities in Ohio:

    -Columbus, great for appreciation, pp is a bit higher around $220k for multifamily

    -Cincinnati, has a mix of cash flow and appreciation, average multifamily around $180k

    -Cleveland, has alot of cashflow potential, average multifam around $140k

    There are other smaller markets like Dayton, Akron, and Toledo, however there is not alot of economic drivers to those areas?

    Looking for cashflow? Look into Cleveland, its got good cashflow potential with appreciation happening as well.

    Looking for appreciation come to Columbus, there are still 1% deals, but the more attractive part is the population growth and other economic drivers!

    0Reply
  • Jessie Kersh Hunt
    Real Estate Consultant · Fayetteville, AR · Member since 2022 · 6 posts · 5 votes
    4y

    Check out Northwest Arkansas. 6 Fortune 500 companies in a small area with an SEC University. The cost of living here is inexpensive. 

    2Reply
  • Dom Battezzato
    Rental Property Investor · SAN DIEGO · Member since 2022 · 90 posts · 42 votes
    4y
    Quote from @Claude Vargas:
    Quote from @Dom Battezzato:

    Hi Claude, 

    What are the cash on cash returns you are finding in the Texas market? 

    Also, how far out until you want to produce 10k-12k a month in cash flow?  

    Thanks! 


     Hey Dom! In Dallas, mainly breaking even but it Houston, seeing some deals here and there. Anywhere from $100-$400 per unit, but most buyers are willing to bid over asking price by $20k+

    I'm going to aim to reach this goal within the next 10 years. I know people owned multiple units within a span of a few years, so It's possible. Just have to get started and stay eager. 

    Sorry I mean cash on cash from a percentage bases. Meaning (down payment)/(cash flow on a yearly bases after expense) Should be a percentage, thanks! 

    Have you looked at Florida or Arkansas? 

    0Reply
  • Conner Olsen
    Real Estate Agent · Austin, TX · Member since 2020 · 1k+ posts · 941 votes
    4y

    @Claude Vargas I changed my rental strategy and doubled my rents. When I bought my duplex in North Austin I was getting $2,400/month gross as LTR. I furnished my property and started renting monthly and now I'm making $5,700/month gross. My cashflow is going to be $2,000/month. You should look into MTR as a way to increase your cashflow!

    0Reply
  • Lane C.
    Rental Property Investor · San Jose, CA · Member since 2020 · 47 posts · 4 votes
    4y

    @Claude Vargas if you’re looking to generate that kind of passive income I would jump into short term rentals. Buying long term rentals that cash flow at 300 dollars a month will take far longer to achieve that point. Also based on my experience with long term rentals that cash flow a few hundred a month all it takes is one big expense to wipe out your cash flow for the whole year.

    0Reply
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