Buying rental with negative cashflow for the first 3 years

[Luciano Suehara]

Hi everyone, new member here and I'd like the opinion from the experts. 

Im currently looking to purchase rental property and Im using the BiggerPockets tools (Rental Property calculator and Rent Estimator) to understand if it makes sense or not. 

I've ran some simulations and the properties are showing negative cashflow (-1% -2%) for the first 3 years, but then after year 3, things start to go back up with positive cashflow.

I wonder if it make sense to take this risk, buy the home (with 20% down), maybe refinance later on (considering that the rates will go down) and eventually improve the cashflow?

Any strategy that you guys recommend in this case or better wait for the right opportunity?

Thanks

[Bob S.]

Quote from @Luciano Suehara:

Hi everyone, new member here and I'd like the opinion from the experts. 

Im currently looking to purchase rental property and Im using the BiggerPockets tools (Rental Property calculator and Rent Estimator) to understand if it makes sense or not. 

I've ran some simulations and the properties are showing negative cashflow (-1% -2%) for the first 3 years, but then after year 3, things start to go back up with positive cashflow.

I wonder if it make sense to take this risk, buy the home (with 20% down), maybe refinance later on (considering that the rates will go down) and eventually improve the cashflow?

Any strategy that you guys recommend in this case or better wait for the right opportunity?

Thanks

Why would you buy a property with negative cash flow, makes no sense? Why not buy them with 20% or better net caps and make money from day one. If it is already negative what if it depreciates now, you really have issues.  I would never to into a situation where I am losing money from day one, 

All the best