Updated almost 6 years ago on . Most recent reply
Crunching number to get cashflow
I’ve been constantly looking for deals but can’t seem to find a cashflow positive house.
Example A.
House is $59,000 asking price (worth $80,00). Let’s say I get it for $48,000 (80% off), no down deposit, which is doubtful. I put 20% down equalling a loan amount of $38,000. After I calculate insurance, taxes, management, repairs and vacancies, my cashflow is right at $100. Is that enough when I haven’t even considered CAPX?
Most Popular Reply
#5 All Forums Contributor
- Plymouth, MI
Math works...but it's not good math. The goal is to get to the point where your cash flow total over time = the amount of money you put it = DP. Although a higher DP means higher CF, it also means a lot longer time period to recover your cash in.
What's really (I'm trying really hard to think of a nice word to use here), Uh, "not smart", is thinking that somehow increasing your DP to change negative CF to positive CF is a good thing. All you're doing in that case, is paying all your negative CF upfront. It's an illusion.