Cash flow on LTR

[Bonnie Glidewell]

Hello, my husband and I are loving this podcast recently shared with us. We own one LTR (since 2021) and are starting to look for a second. Regretting not doing it last year with high interest rates now, however...besides that, I want to ask about cash flow. I've been approaching my LTR as a break even but keep hearing about cash flow. When I plug numbers into the cash flow calculator, I can't seem to find a property with any flow or hardly break even with all numbers considered even without PMI, no management fees, 20% down etc. There's a housing crises (Southern Oregon) so I think in a few years it will certainly be worth it, but what am I missing here?

[Lawrence Potts]

Quote from @Bonnie Glidewell:

Hello, my husband and I are loving this podcast recently shared with us. We own one LTR (since 2021) and are starting to look for a second. Regretting not doing it last year with high interest rates now, however...besides that, I want to ask about cash flow. I've been approaching my LTR as a break even but keep hearing about cash flow. When I plug numbers into the cash flow calculator, I can't seem to find a property with any flow or hardly break even with all numbers considered even without PMI, no management fees, 20% down etc. There's a housing crises (Southern Oregon) so I think in a few years it will certainly be worth it, but what am I missing here?

Hey Bonnie,

No, you’re right, you’re not missing anything in regards to cashflow and the housing crisis in Southern Oregon. You’ll have to get creative like most of us are having to do in the rogue valley. Trial and error until you find a lane that works. Maybe that’s short term rentals, rent by the room, lease purchase agreements, etc. But you’re going to have to think outside the box and really work hard to find that cashflow. Another thing about cashflow is your tolerance to risk: you could adjust your maintenance reserves and capex, or manage yourself, etc., but it comes with its own challenges. Reality is that cashflow is not passive and never truly has been and never will. It’s a measure of how passive you want it to be to fit your lifestyle and at what cost. Hope that helps you taking the next step.