What's your magic cash flow number?

[David Lund]

Been analyzing a bunch of properties to see which ones around me cash flow (honestly not many unless I low ball an offer), but curious to know what cash flow value you all pull the trigger on? Just trying to figure out in general what's a good value to aim for. I take into consideration the mortgage payment, taxes, insurance, 8% vacancy rate, $150/month in repairs & maintenance, $150/month in CapEx, a small property management fee since I'll subscribe to pro on here to use their resources ($32/month). Still unsure if I want to house hack a duplex or get a SFH and rent it out after a year.

Any advice or insight is appreciated. Thank you

[Randall Alan]

Quote from @David Lund:

Been analyzing a bunch of properties to see which ones around me cash flow (honestly not many unless I low ball an offer), but curious to know what cash flow value you all pull the trigger on? Just trying to figure out in general what's a good value to aim for. I take into consideration the mortgage payment, taxes, insurance, 8% vacancy rate, $150/month in repairs & maintenance, $150/month in CapEx, a small property management fee since I'll subscribe to pro on here to use their resources ($32/month). Still unsure if I want to house hack a duplex or get a SFH and rent it out after a year.

Any advice or insight is appreciated. Thank you

For us it’s a minimum of $300/door/month after PITI and a maintenance reserve. So a duplex would be $600/month.  Below that it isn’t worth the hassle.  We have found much better deals on occasion.  We have some units that we are at $800/month (rare - but it happened - and we were giddy!)  

The key is really to buy right.  How have we done it?  We’ve bought from wholesalers, off Craigslist more than once (seriously)! Referrals from friends for a few as well - but many more just off of MLS.  The deals are out there… few and far between, but you can find them.

Here’s one of my better tips on how to search… Redfin’s website lets you sort their listings by $$$/square foot.  This is one of the keys to quickly searching for an undervalued property - but there is a secret to making it work - you can’t be really zoomed out on the map - you need to be zoomed in pretty close to be able to sort on the $/sf column.  If you are zoomed out to far that column isn’t sortable.  Very quickly you can find the cheapest properties with the best $/sf pricing.  After that it’s about sorting through the trashed properties at the bottom of the list to find the ones that will meet your requirements as to condition and value.  We started out buying C class properties that needed less than $3,000-$5,000 work to be rentable.  

hope it helps!

Randy