$1,000 a month CF with $100K?

Question

If I had a $100K, is it reasonable to find a deal that will achieve $1000 a month in cash flow?

A portfolio of 4 $100K SFH home that produce $250 in cash flow?

A $400K multifamily that produces $1000 in cash flow?

What markets might currently have opportunities like this?

Alan Jorgenson · Answer

@Matthew Terry- Great question and one I've been pondering myself.  What about investing in a syndicate?  I've seen some say IRR's of 12.5% up to 25-30% over 3-5 years.

I'm struggling with the same dilemma.  Been running numbers on many different properties.  Multi-family always seems to bring the better CoC return.

Antonio Cucciniello · Answer

@Matthew Terry This depends on what your definition of cash flow is.

In the end the short answer is it is possible.

The long answer is it depends on a bunch of factors.  If cash flow is your goal, I would look at cities that have the best price to rent ratios and use that to determine a city where your chances are higher to achieve your goal.

Jonathan R McLaughlin · Answer

@Matthew Terry

If I had a $100K, is it reasonable to find a deal that will achieve $1000 a month in cash flow?

*sure, thats a 12% COC return. Aggressive but certainly not impossible

A portfolio of 4 $100K SFH home that produce $250 in cash flow?

*I would bet this would be your riskiest option but thats SO market dependent...around New England this is a very low price point most places, with lowish rents [And I'm not even talking around Boston...different animal]. And I'd want more than a $250 margin on a SF.

A $400K multifamily that produces $1000 in cash flow? $500 a unit? Again, doable but aggressive. You would want to see about 3500-4000 in rents to get there, so you'll need to have the rents at $12001400 a unit on a 3 family. Should be easy to check your market and see if thats out there. Also, this is a price point you may be able to convert from 900-1200 in rents.

What markets might currently have opportunities like this?

Lots. I doubt you would get these numbers in a turnkey situation though.

Henry Lazerow · Answer

If you put 25% down at low interest rate on a 4 unit you should be able to get at/over 12% COC. I like 4 units as they cashflow well and make your total expenses per a unit lower due to one roof, etc. This will be especially true if you do a bit of value add even basics like kitchen updates and raise rents.

Lien Vuong · Answer

B Class area properties (3-4 families) 30 minutes outside of Boston would achieve these return metrics.

Andrey Y. · Answer

A 12% leveraged return is quite high in today's environment. You could certainly achieve it if you want to put in some sweat or take on a higher level of risk.

I prefer to make sound investments instead of chasing yield on paper.

Aubrey Tatarowicz · Answer

Definitely possible, but as others have posted can be hard to reach.  For example in single family homes, you can probably cash flow ~$250 per home per month, but you may wipe out cash flow for a couple of months for vacancy or make-ready when tenants move out.  Another option is investing in syndication which will likely give you more consistent cash flow, but right now, many syndications are looking at around 8% year over year with an additional upside when the underlying investment is sold.

Will Fraser · Answer

Hey @Matthew Terry, this is a fun puzzle-type of question!

This is certainly possible and was readily available in quality markets even as recently as last.  I was seeing this with quality properties in Oklahoma City in 2019 and still occasionally come across something that would conform to that pace, but there's a lot of trash out there painted like ponies.

The surest bet would be a house-hack + a few single families, but for a non-owner-occupant investor I'd say 4 single family houses in a market like Little Rock would be a quality approach.

Joe Splitrock · Answer

You are probably not going to buy off the MLS and see this type of return. At least not if you hire property management and allocate for CAPEX. You will need to find an off market deal or do some type of value add. Self managing reduces costs, but then you are trading time.

I would advocate looking for yield and value. Yield is cash in your pocket each month and value is appreciation over time. I like a mixture of both.

Matt Nico · Answer

@Matthew Terry

I dont think the money you put down should mean more cash flow. I put 5% down on my first 3 houses and they cash flow about $5,500 total between them.

The deals are out there. Just go find them and be creative. Thats what i have done at least.

Happy housing,

Matt

$1,000 a month CF with $100K?

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