What's your cash flow strategy for 2024?
Investor · Mountain View, CA · Member since 2023 · 5 posts · 12 votes
What's your cash flow strategy for 2024?
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Real Estate Agent · Atlanta, GA · Member since 2020 · 1k+ posts · 1k+ votes
2y@Alex Rodgers, over the past two to three years, my clients and I have been implementing the investment strategy of rent-by-the-room in Atlanta, GA. It's a high-risk, high-reward strategy and is not for everyone, if I'm being honest. That being said, these deals are absolute cash cows. For further insight, research rent-by-room companies such as HomeRoom and PadSplit. Moreover, I'd be happy to chat if you want to learn more. FYI, many of these deals come directly from the MLS. With challenging market conditions, investors are forced to get creative. Those who aren't getting creative are buying negative cash flow/break-even or acquiring their deals off-market.
37 Replies
- Rental Property Investor · San Francisco Bay Area · Member since 2022 · 1k+ posts · 1k+ votes2y
Get the rent on my Bay Area SFH up to market rate, may do MTR one of the rooms (existing tenants are okay with this), raise rents on existing tenants in mult-unit (a little difficult since it's under rent control so for 2023 could raise it 3.6%), raise rent on existing tenant Class A Indianapolis home (still figuring out the amount, don't want to scare away a great tenant).
Indianapolis Class C #1 continue to rent out and hope it stabilizes in 2 to 3 years (had repairs 6 months out of 7 months for first year). This was supposed to positive CF on paper, it's -$300 to -$700 a month so far. Indy Class C #2 sell it and cut my losses or try to rent out at -$200 to -$250 cash flow (got an honest property manager feedback) and hope it stabilizes in 2 to 3 years. This was break even when I ran the number initially and made the offer. At 6.99% and 7.625% interest rate they're not doing well. No point in refinancing until rates drop significantly. I didn't use a wholesaler and these are long term rentals.
I could theoretically do cash out refi on Bay Area SFH or take a HELOC against my primary and both have a good amount of equity but that's too risky. I know this is a RE forum but I'm putting my money in more liquid forms of investment and high yield savings account. I don't plan to buy anymore for the near future.
You don't say where your location is but be very cautious about buying OOS - I thought I did my due diligence with talking to local investors, contractors, getting inspections, sewer line scopes, etc. Good luck!
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes2y
@Sam Yin
I agree, buying deeds doing private lending. This is a great time. If you ever looking for loans to acquire. we’ve got 15+ million in our portfolio.
We also have options for non-accredited investors to receive the benefits of owning a loan, but also the tax benefits of not having to pay ordinary income on the interest
7e investments53 Reviews - Investor · Oakland, CA · Member since 2015 · 135 posts · 82 votes2y
@Alex Rodgers Where are you looking to buy? If it's the Bay Area NO, you won't get cashflow and maybe not even appreciation. You will GET high taxes!
Look to Midwest properties where you can get cashflow. Yet maybe slow appreciation.Buy tax sale, property, foreclosures, slow flips.
- Investor · Mountain View, CA · Member since 2023 · 5 posts · 12 votes2yI'm mostly interested in Alabama right now, specifically Huntsville and Tuscaloosa. My strategy was to value-add a property and have it cash flow then refinance if rates go down. The problem is the if part about the rates. I don't really want to have to put 100k in a deal just to get $100/mo cash flow but that's what it has been looking like.
The many suggestions from this thread however have greatly helped give me some other ideas. - Investor · Oakland, CA · Member since 2015 · 135 posts · 82 votes2y
Why would you put down $100k when can use OPM with 20% down. This home is 100K needs some repairs. 4815 Mastin, Lake Rd. NW, Huntsville. AL.
$20,000 down ($20k) finance $80,000 @7.77 = $574.24/mth 30 yr's without T&I.You could then borrow from a PL the $20,000 you put down by giving that person
maybe 12% on their money. Now you have financed the home 100%. (Minus closing costs etc.) Home much would the home rent for?
- Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes2y
I'm still doing the same thing I've been doing since 2019.
I source my deals off-market, I put some work into them, and then refinance after I place a tenant.
The numbers we're doing are pretty similar in terms of margins as they were in 2019. The only difference is purchase prices are higher and rents are much higher.
But the net cash flow is similar.
A lot of folks grew to believe real estate investing is something easy. Pluck an MLS deal, put a tenant in, cash flow.
Real estate investing was never meant to be that easy, and "investors" that were only successful due to ultra low interest rates are learning that they weren't actually investors.
What we're seeing now is a return to what real estate investing used to be... work! You have to actually go out there and find real deals, do the work to force equity, and only then do you get a bit of cash flow that eventually becomes significant years later.
But that's not a get-rich-quick strategy so most folks won't do it. Adapt or die. There's nothing new about our current environment. It's just far different than the only thing many "investors" have known.
- Lakeland, FL · Member since 2018 · 242 posts · 148 votes2y
Quote from @Alex Rodgers:
Hi everyone,
I've been looking for properties for months and am still having trouble finding properties that cash flow. I'm aware that with high interest rates and the crazy rates of appreciation we've experienced within the past few years it's almost impossible to find something on the MLS, but I'm not sure what other strategies are working right now. What strategies have you used successfully in the past year to aquire a cash flowing property? Did you go through a wholesaler? Did you buy a MTR/STR? I'd love to hear about your experience!
Hello Alex, I would agree with Michael on the rent by the room method. My wife and I bought our house in 2022 and have been house hacking the two bedrooms. in 2023 both of our roommates paid for our mortgage completely, while giving us a place to live. Did we have positive cash flow overall with taxes and insurance, no, we paid a little bit for that. But this is far better than spending thousands of dollars on a apartment nearby. When we leave this house in less than a year, we will rent out our master bedroom, this will make the deal overall a positive cash flow property. This was the plan the whole time for us, that this property would be an intermediary property until we got our next place. I think this is something that most people need to consider when getting into real estate investing.
DM me if you'd like to schedule a call to chat about this.
Best,
Brandon - Investor · Oakland, CA · Member since 2015 · 135 posts · 82 votes2y
@Alex Rodgers Alabama, that would be a great area to Slow Flip a home. Learn about owner financing in AL. Buy Scott Jelinek, Slow Flip book on Amazon or listen to the audio book. Forget house hacking, no real money there!
Just today a guy posted about his first slow flip.
>>
Slow Flip #1 Under Contract! This is a 2-bed, 1-bath home in Centrailia, IL that will need some work. I have contracted it for $14K.I am in discussion with a couple of contractors and fix & flippers about selling to them on terms. I anticipate $2,500 down, $700/month, $65k purchase price. With this being my first, I took a little different approach with boots on the ground and got pretty fortunate with finding a local inspection service that has been awesome to work with! I let him know that I would be sharing his info with other members of The Freedom Accelerator. He offers several services so you would have to discuss the specifics of what you need to determine price. I requested a lot more than I probably needed, but I wanted the detail which included interior, exterior and drone views. Please see the link below for property photos as well as Steve's contact info.<<
Time will tell if he gets the sale he wants. My thinking on SF's is ask a price about $10k-$20k above purchase price. Buy a higher priced home with the goal of a fast sale to a tenant owner with less work involved. So of the SF's I've seen and one I sold was a real problem house ( I didn't know about Slow Flipping at the time. I just wanted out). The guy I sold to flipper it for $69k. How long will it take you to make $10,000 house hacking? A long time. How many people want to OWN a home but can't qualify? MANY! Owner financing is the key. No credit checks, small down payment. You get paid monthly and have NONE of the traditional landlord responsibilities. - Real Estate Consultant · Cleveland · Member since 2020 · 6k+ posts · 3k+ votes2y
Quote from @Alex Rodgers:
Hi everyone,
I've been looking for properties for months and am still having trouble finding properties that cash flow. I'm aware that with high interest rates and the crazy rates of appreciation we've experienced within the past few years it's almost impossible to find something on the MLS, but I'm not sure what other strategies are working right now. What strategies have you used successfully in the past year to aquire a cash flowing property? Did you go through a wholesaler? Did you buy a MTR/STR? I'd love to hear about your experience!
keep buying props with 20% is so net caps based on cash purchase, All in 80ksih, rents 1300- 1400,
- 2yWale LawalBusiness MemberReal Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
In a competitive market, it might be difficult to find cash-flowing properties, but there are a number of tactics and methods you can take into account. Several tactics have been effectively employed by investors:
Look Outside of the MLS for Off-Market Deals. Developing contacts with wholesalers, going to neighbourhood real estate events, and networking with other real estate professionals can all help you gain access to off-market acquisitions.
Utilise direct marketing techniques to get in touch with property owners directly. Some examples of these techniques include sending out targeted mailers or running internet advertisements. Finding motivated sellers who may not have advertised their properties yet might be facilitated by doing this.
Buy, Rehab, Rent, Refinance, Repeat, or BRRRR: Look for homes that require work, make the necessary improvements, and then refinance to recover your initial investment. This is a potentially useful method for increasing equity and generating cash flow.
Turnkey Properties: Look into markets with available turnkey properties. These are pre-renovated properties that are available for renting. They might not require major upgrades, but they can have a greater initial cost and offer instant income flow.
Keep in mind that every market is different, and strategies that are successful in one may not be in another. It's critical to keep up with local market circumstances, remain flexible, and never stop looking for new chances. Furthermore, establishing a solid network within the real estate industry might offer beneficial insights and potential deals.
Feel free to share more details about your specific market, goals, and constraints, and the community can provide more tailored advice.
NETWORTH BUILDERS5236 Reviews - Investor · Member since 2021 · 8 posts · 7 votes2y
@Mike Paolucci what part of Cincy do you recommend? I'm originally from Ohio and hear Columbus is getting a bit too expensive, but conversely hear that deals in Cincy are still possible.
- 2yJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votes
Quote from @Alex Rodgers:
Hi everyone,
I've been looking for properties for months and am still having trouble finding properties that cash flow. I'm aware that with high interest rates and the crazy rates of appreciation we've experienced within the past few years it's almost impossible to find something on the MLS, but I'm not sure what other strategies are working right now. What strategies have you used successfully in the past year to aquire a cash flowing property? Did you go through a wholesaler? Did you buy a MTR/STR? I'd love to hear about your experience!
I moved to Columbus a few years ago (from Portland, Oregon which was super expensive) to become a full time real estate investor, and ever since, I've completed quite a lot of BRRRRs, flips, and own a successful rental portfolio here in Columbus Ohio. There's so many catalysts for population and job growth (Intel, Honda, Amazon, Nationwide Hospital, etc). I can definitely tell you there's still a lot of positive cash flowing and 1% rule deals and you get amazing appreciation. As an investor and agent here in Columbus Ohio, if you have any questions or want to connect, definitely reach out!
Jimmy Lieu, Red 1 Realty4.9120 Reviews
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