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Sparkle Carlock
  • New to Real Estate
  • Indianapolis, IN
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What's a "good Cash flow" range?

Sparkle Carlock
  • New to Real Estate
  • Indianapolis, IN
Posted Apr 13 2023, 11:11

Hi BP.! 

I am trying to narrow down the strategy I'd like to used to get started. As I look at properties around me, I am stuck between (1) entering REI with a flip to gain more investing captial and (2) acquiring a property for LTR. My question is: when trying to understand what type of property deal/numbers would benefit/profit, what is considered a profitable monthly cashflow opportunity?

I appreciated any advice from you! Just trying to gain as much understanding as possible before investing personal finances! 

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Brock Mogensen
Pro Member
  • Real Estate Syndicator
  • Milwaukee, WI
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Brock Mogensen
Pro Member
  • Real Estate Syndicator
  • Milwaukee, WI
Replied Apr 17 2023, 08:01

I prefer to look at the Cash on Cash return metric instead of a $/month number.  As that will change with size of property/numbers of doors.  For me I like to get to 10% cash on cash.  Often times you won't be able to walk in year 1 at 10%. So I like to buy properties with existing cashflow with value add opportunity to get to 10% within 2-3 years.

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Mark Jones
Pro Member
  • Property Manager
  • Indianapolis, IN
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Mark Jones
Pro Member
  • Property Manager
  • Indianapolis, IN
Replied Apr 19 2023, 06:35

I think your time frame is important to consider as well.  If you are looking for long term wealth and don't need cash now, I would do a buy and hold.  Much safer over the long term.  If you analyze it right, it's hard to go wrong in Indianapolis!  Make sure you have a team of experts helping you to analyze it since this is your first time.  There are a lot of great resources in BP that can help you get started.  Good luck!  

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Ryan Ness
  • Realtor
  • Lafayette, IN
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Ryan Ness
  • Realtor
  • Lafayette, IN
Replied Apr 20 2023, 10:51
Quote from @Dominick Johnson:
Quote from @Ryan Ness:
Quote from @Dominick Johnson:

Anything not netting a negative cashflow is profitable, but only you can determine how much profit is worth your time and investment. I personally set a minimum of $300/month cashflow for me to consider purchasing a property.

Same factors will help you determine whether to do a flip or LTR. Flip will take you probably 6 months of hell and you have a huge learning curve being your first REI, which is high risk for minimal (if any) profit. Rentals can be renovated in a few weeks and if renting doesn't work out you can likely sell it quickly in this housing market with lack of inventory.

Best of luck!


 Thanks for your reply Dominick. By this are you meaning $300/mo per unit?

Correct. People who say cashflow doesn't matter and focus on CoCR on your investments aren't trying to retire early through REI. They are focusing on REI being their source of income in retirement. I want to have time freedom now, not when I only have 15 years of quality life left. The way to do that is by replacing your income now with passive income, aka cashflow.


 Not to mention that the cashflow is that extra cushion if absolutely everything went south!