How easy is it to produce $1000 in cash flow from 100k with RE?

15 Replies

How easy is it to produce $1000 in cash flow from 100k cash invested in real estate? Where would I have to invest to produce $1000 in cash flow with 100k cash ? Are there any turnkey companies that I could do this with? What are the methods?

Can a newbie do this? If not, what would be a more realistic cash flow number with 100k cash invested? I want to know the cash flow # I can produce easily with 100k cash invested in real estate basically.

Are you assuming it’s 100k leveraged real estate or 100k equity?

If it’s leveraged at a normal amount of 20 or 25 percent equity, I would say this is fairly difficult to do long term. Assuming you mean 12k annually this is 12 percent return, assuming 100k cash. Long term that could be fairly challenging I think.

If you are talking 100k cash and not leveraging j think that’s much easier

Originally posted by @Caleb Heimsoth :

Are you assuming it’s 100k leveraged real estate or 100k equity?

If it’s leveraged at a normal amount of 20 or 25 percent equity, I would say this is fairly difficult to do long term. Assuming you mean 12k annually this is 12 percent return, assuming 100k cash. Long term that could be fairly challenging I think.

If you are talking 100k cash and not leveraging j think that’s much easier

 100k cash invested in real estate. 

If I could ask, What does it mean to leverage? Can you give an example?

Originally posted by @Caleb Heimsoth :

Are you assuming it’s 100k leveraged real estate or 100k equity?

If it’s leveraged at a normal amount of 20 or 25 percent equity, I would say this is fairly difficult to do long term. Assuming you mean 12k annually this is 12 percent return, assuming 100k cash. Long term that could be fairly challenging I think.

If you are talking 100k cash and not leveraging j think that’s much easier

100k cash used to buy one or two properties with minimal leverage would be fairly easy to do that with.

10% Cash in Cash is not at all unusual. May have to leave your home market. I don't see it in the Bay Area anymore but it's out there.

@Tom Smith Depends on each investor. For me, I can do two deals buying mobile homes all cash (with definitely less than 100k!)  and make that kind of cash flow. Some buy and hold landlords have a minimum they make per door ($100-$300+) so it depends on the market, how much you put into each property, and the property type. Good luck with your search! 

Originally posted by @Tom Smith :

How easy is it to produce $1000 in cash flow from 100k cash invested in real estate? Where would I have to invest to produce $1000 in cash flow with 100k cash ? Are there any turnkey companies that I could do this with? What are the methods?

Can a newbie do this? If not, what would be a more realistic cash flow number with 100k cash invested? I want to know the cash flow # I can produce easily with 100k cash invested in real estate basically.

We talking $1k/mo or annually? $1k/mo would be 12% ROI. I'd say that's pretty optimistic. Even Midwestern markets properties are trading at a much lower clip than 12% ROI for properties. If you were local to those areas & self managed it'd be close but 8%ish is a more likely scenario.

@Tom Smith

First off this is not advice and should not be taken as such just my thoughts.

First, what is your situation? Is this your only $100K? How much would you miss it if you lost some? Do you need the income? How much time do you want to put into this including learning, traveling, managing etc.? Do you want monthly checks or lumpy income is ok? All these things will greatly influence the strategy you take. Without it very few can tell you the answer to your question. Yes many people I think can hit those numbers, butthe flip side is many of them put a lot of time into this RE thing and others are taking on risks to do so (some good risks some not so good). 

Second, I think the fact that this didn't get a sure can do it no problem should tell you something about the market today. The great thing about BP is you can go back in time and if memory serves me correctly this question has been asked before and people were a lot more positive. Fact is, returns have come down because prices went up. Going back to the questions above I don't know what your situation is but assuming its more of a passive investor (by location) keep in mind many people on here have to invest you don't.

Third, if you don't need the income now you might want to think in terms of total return and not just cash flow. You might not get a check every month but if the return on the total investment is good I see it as the same but I also don't need the money to live on today.

In the end, I certainly know people making that. Some are even doing it on debt investments which are more secure than equity. Issue is they are subject to risks. If you lend to a flipper you might end up with less or it might take longer meaning your yield would go down. It might still be safer than equity but its still not money in the bank every month no matter what. 

For equity, its really the same story yes its possible but you probably have to put in work or take some risks. I have turnkeys that those numbers but then sometimes they don't give me anything in cash for a few months. I also have flips, again same story sometimes I get as big check and sometimes it takes longer and the check is smaller. On average I am hopeful to be at much higher than your number (as it should be for the risk) but maybe not and I have certainly had my fair share of war stories. 

@Tom Smith I think that is a pretty attainable goal and can happen multiple ways. From using 100k for a down payment on a multifamily property to purchasing a couple of mobile homes. Depends on how you want to do it, but definitely attainable as long as you buy correctly.

I think it would be possible depending on the deals you could buy multiple properties and use the brrrr strategy. This would allow ur money to work harder, allow to get more for your money, but would need to find great deals. I recommend oos investing and learn about brrrr. 

@Tom Smith

Looking at it from the 1% rule, buying RE for $100k and get $1000 a month in rent? We are not talking about expense, just gross rents of $1000. 

Answer. Yes. There are duplexes in Cleveland, Ohio, where you can buy for 80-100k that will rent for $700 each, or $1400 for both.

Terry

@Tom Smith easily attainable if you invest it correctly.

In syndication for example, the standard is an 8% preferred return (the limited partners receive 100% of profits until 8% annually is met), 70/30 split thereafter. This is as close as you can get to guaranteed and is the bare minimum. More than likely you'll see a 8%+ CoC (think 9-11% ish) and an IRR in the 16-23% range. These are also conservative projections (if they're not conservative, I'd say to avoid investing with that Sponsor), with good Sponsors often exceeding them.

Some of our private lenders are making 12% on their money. This would be $1000/month on $100k invested. So I would say this is very easy to do. 

12% ROI on a leveraged purchase is even easier to do in certain markets.

@Tom Smith sophisticated investors get at least 15-20% on their money. However it requires experience and a good network. Something that does not happen right away.

Yeah, it's possible. Example: Purchased duplexes cash Est. 75K in MO and their gross rent are 1600 total a month. After expenses it's about 1100-1200 each when averaged out. Shouldn't be too tough to find homes around 90-100k and get Est. 12% return if you look around enough. It's important to know depending where you look you may not get much appreciation. Always remember that buying real estate is more than just numbers. Doesn't matter how good the numbers look if you can't collect rent or find a tenant. 

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here