I have a good stable job, so cash flow is not needed to live on. But the B class duplex properties in my area (Springfield MO) are priced so they don't cash flow before they're paid off.
in other words I have to cover $300-600/month for about 5 years (on a $250K+ properties).
The reason I can pay off in 5 years is I have ability to pay large amounts against principal every month (from my regular job income), but I only have 82K for a down payment.
Once it's paid off, the property would produce almost 1000$ net cash flow.
Are these good numbers or do I need to do things differently?
What is a good strategy in current economic market for B class properties that don't cash flow immediately?
Rental Property Investor · Gwinn, MI · Member since 2016 · 174 posts · 103 votes
11mo
That doesn't sound like good investment numbers to me. If you had to cover $600/month for 5 years, you're putting yourself in the hole by $36k in that time frame. It will then take you at least 36 months afterwards just to break even. That's 8 years with a 0% return. Do your calculations include CapEx expenses (roof, appliances, flooring, etc.)? I'd keep looking for a better deal.