Updated almost 3 years ago on . Most recent reply
Cash Flow vs. Appreciation
Hey all,
Been really getting into the community and am super excited.
Heard a lot of people talk about either wanting a multi family property to cash flow off the bat, or that it doesn't matter if you aren't cash flowing in the beginning because after year 1 or 2 you will bank off of capitol appreciation and you will be able to raise rents to a cash flowing state.
Just wanted to hear what everybody opinions on this were and which side of the fence you stand on.
Most Popular Reply
#5 All Forums Contributor
- Plymouth, MI
NO. Negative cash flow just adds to the cost of the property. Equity isn't real, until you sell the property and convert it to cash. As the property appreciates, you are actually losing money because the value of your cost to buy is going down.