How to cash flow $10,000 a month?

17 Replies

I've set myself the goal of eventually earning $10,000 per month.  I have a lot of free time, I'm willing to work as hard/long as it takes, I have no experience and have never bought a property.

Is figuring out how to buy an apartment building the best thing to do?

Hello and your question is worth addressing Cayce! I would say that apartments are the best way to go with rentals in today's economy. It depends on how much money you have to invest in real estate? You may need to raise money. If you can clear, after any debt price is made, requires about 50 units if you determine making $200 per unit after all payments including the debt payments and property tax, you need about 50 units. If financing is involved and repairs/rehab is required, Banks will probably not loan to you without experience.

If financing is required you might want start small and work your way up to about 50 units.  The $200 a month per unit is doable.  Planning on making a net of $100 per unit is more possible but that would take 100 units.  Hiring an experienced Property Management Company should be under your budget of that many units (either one) and include your monthly reporting requirements including financial and occupancy reports that are necessary for you.

One good thing that is to be a

good thing in that type of investing only requires one address. There is less competition in this type of investment which is more dependent on the income versus comparables which are usually more retail as your competition is. It also uses the capital rate that makes you more value per the buck spent because of the cap rate, typically. Ideally you need a 6 to 8 cap rate that is used in your selected area.

You also need several factors that will change it's value, like amenities, location, near a good business highway access,  a good school district, good first impression, a good public transportation stop, parking, frontage road access, etc..  You also want good demand for that area and see what the other apartments in your area are doing to be more competitive and their current rents per unit type which will also tell you the best unit type existence.

I would also want to know that area's other retail facilities that are nearby and pose any problem with your planning.  I would also look to see if there is anyway to increase your prospects by proving nicer exterior improvements like paint and landscaping that could improve a prospect's first impression.

If there is anything else you think I might present to you, please contact me through this site because I am on it just about everyday. Why should I pay attention to him anyway?  Well I' m currently 61 and have much work in construction management and a fair experience in real estate.  I graduated from college with honors in business that emphasized real estate.  I was born and raised in Dallas, Texas.

Good luck to you!

Thanks very much to everyone who took the time to answer, I really appreciate your insights @Michael Lee

I guess I should have mentioned I am Canadian, currently located in British Columbia.  Although the principles are the same, I get the feeling prices are a lot different up here (SFD being sold for an average of $700,000), if anyone has any tips/tricks on how to get my feet wet in expensive markets, with the long term goal of earning 10K/month in cash flow I would very much love to hear it!

Originally posted by @Cayce Fedberg :

Thanks very much to everyone who took the time to answer, I really appreciate your insights @Michael Lee

I guess I should have mentioned I am Canadian, currently located in British Columbia.  Although the principles are the same, I get the feeling prices are a lot different up here (SFD being sold for an average of $700,000), if anyone has any tips/tricks on how to get my feet wet in expensive markets, with the long term goal of earning 10K/month in cash flow I would very much love to hear it!

I would be looking up province.. Kelowna  Vernon  Salmon arm  for AIRBNB  Kamloops  Revelstoke.. and even maybe Merritt.

@Jay Hinrichs Just curious, why did you mention those areas? I currently live on Vancouver Island (Victoria), I'm have a very hard time making the numbers work on anything I find on the MLS, analyzed about 25-50 so far. I've been trying to research other markets but I don't really know how to research what a good market would be, should I be focused mainly on price? I keep hearing location, location, location and "people want to live where the jobs are" but I don't really see any major employment opportunities outside of major cities - or maybe I'm just bad at researching them.

Thanks for your time.

Originally posted by @Cayce Fedberg :

@Jay Hinrichs Just curious, why did you mention those areas? I currently live on Vancouver Island (Victoria), I'm have a very hard time making the numbers work on anything I find on the MLS, analyzed about 25-50 so far. I've been trying to research other markets but I don't really know how to research what a good market would be, should I be focused mainly on price? I keep hearing location, location, location and "people want to live where the jobs are" but I don't really see any major employment opportunities outside of major cities - or maybe I'm just bad at researching them.

Thanks for your time.

cash flow is not everything all I know is I bought a home on the Okanogan golf course in 2001 for 165k us 200k Cdn. and that house today is worth 600k cdn.. real estate is a LOOOONG game . and the big money is made in appreciation in our area not cash flow

@Cayce Fedberg 

It's not hard to reach 10k a month cash flow if you think outside the box. I only have 10 SFR and cash flow double that a month. Plus I make double 10k a month buying flops not flips. There's so many ways to make crazy money in real estate. I'm just tapping 2 and doing great.

Originally posted by @Caleb Heimsoth :
@Cayce Fedberg

Figure earning 8 percent annually on your capital so you’d need 120k divided by .08 or 1.5M In invested cash

Not far off, depending on the type of market you're investing in.  I would guess $1.5M in midwest/cheaper markets would do it, double to $3M in moderately expensive markets that appreciate nicely.

I had about $2M invested to reach $10k per month net, but I started buying 15 years ago, 90% off-market, belly to belly with sellers that were at least moderately motivated.  No back of the frenzied buyer line wondering how many purchase contingencies I can remove so the seller would pretty please pick me. 'Here's a nice letter and pic of my kids and puppy'. LOL

Originally posted by @Cayce Fedberg :

@Steve Vaughan any thoughts on Canadian markets?  

Nah. For Canadian-specific I'd reach out to Roy N or Thomas S.

You have an expensive market issue and you're only 'researching' RE that's already on the market for all to see.  Got to get in front of sellers that aren't yet selling, as I said.  Belly to belly, high grass or tired looking property.  Do your research while driving, walking or biking around. 

@Steve Vaughan I also don't have the funding to buy on my own yet - I have some family who can help me but I would need to put the deal on paper and present it well before they would lend to me.  Can you go belly to belly before you have the funding?  Thanks for taking the time to help me, very much appreciated.

Originally posted by @Cayce Fedberg :

@Steve Vaughan I also don't have the funding to buy on my own yet - I have some family who can help me but I would need to put the deal on paper and present it well before they would lend to me.  Can you go belly to belly before you have the funding?  Thanks for taking the time to help me, very much appreciated.

With enough knowledge to solve their problem, yes. I've taken over low equity mortgages or lease optioned pretty, low equity houses before. Wholesaling takes the most knowledge of all, but is an option for the capital-challenged.

I'd go to my library and check out a RE book.  Turn off all devices and READ.