IMO here is what's missing from BP, Podcasts and all my research so far.

General Real Estate Investing
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IMO here is what's missing from BP, Podcasts and all my research so far.

John J Kelly III
Member since 2024 · 18 posts · 8 votes

I've listened to so many podcasts, read the books, spent wayyy too much time on this forum all in an effort to educate myself about REI and specifically SFH vs Multi. Just today, 5 different podcasts discussing how people started with 0 and now have 80, 100, 500, 800 and even 1000+ doors. They all talk about financial freedom, cash flow, appreciation and all the good stuff, even so much as some starting with very little money of their own. Many have reached their "financial freedom" which is my goal. So what's missing in all these podcasts and forums?? No one mentions the cash flow. Everyone has crunched the numbers and to get about 20k per month in cash flow you need 50+doors and about 20mil in RE. 20mil in RE means a ton of $$ down. Unrealistic for all of us.

So, is anyone willing to give numbers?  My cashflow is $20,000/mo with 30 doors and about 400k in cash for down payments, etc.    The podcast today, popular guys with a well known podcast, they have 80 doors but not once mention cash flow.

I'm concerned my goal of 20k cash flow is unrealistic.  Of course it won't happen over night but is it possible?  People mention 1000+ doors but never mention the cash flow. 

That's my mini rant of the day.  

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
1y
Quote from @Chris Seveney:
Quote from @John J Kelly III:

I've listened to so many podcasts, read the books, spent wayyy too much time on this forum all in an effort to educate myself about REI and specifically SFH vs Multi. Just today, 5 different podcasts discussing how people started with 0 and now have 80, 100, 500, 800 and even 1000+ doors. They all talk about financial freedom, cash flow, appreciation and all the good stuff, even so much as some starting with very little money of their own. Many have reached their "financial freedom" which is my goal. So what's missing in all these podcasts and forums?? No one mentions the cash flow. Everyone has crunched the numbers and to get about 20k per month in cash flow you need 50+doors and about 20mil in RE. 20mil in RE means a ton of $$ down. Unrealistic for all of us.

So, is anyone willing to give numbers?  My cashflow is $20,000/mo with 30 doors and about 400k in cash for down payments, etc.    The podcast today, popular guys with a well known podcast, they have 80 doors but not once mention cash flow.

I'm concerned my goal of 20k cash flow is unrealistic.  Of course it won't happen over night but is it possible?  People mention 1000+ doors but never mention the cash flow. 

That's my mini rant of the day.  


 I do not believe anything many of these podcasters say. I know several who do what we do and they all talk a big game but everything is at a 30,000 foot level that you could find off chatgpt and many do not give numbers because they actually are full of it on where they are really at. 


reality is there are very few that actually live off of cash flow with max leverage .. they need to keep working and NOT take a dime out of the rents lest they find themselves in major financial trouble. positive cash flow with max debt for 90% plus investors needs to be saved or ploughed back into cap ex   reserves or pay down debt.. you get wealthy in RE over time and when your debt starts to fall away. Clients of mine that live on cash flow have either zero debt or very little..  My personal banker and I always talk about this when we go fishing.. the misconception of financially free on rentals.. I mean he banks nothing but entrepreneurs. 

So in my mind change your goals.. forget the cash flow is going to set me free with max debt its not realistic at todays prices and interest rates. 

I have clients that own well over 100 rental units and none of them take a dime out of cash flow in many cases they still need to feed the portfolio from time to time to keep it healthy. But once these get paid for they will be very rich.
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  • Greg ScottPro Member
    Rental Property Investor · SE Michigan · Member since 2014 · 4k+ posts · 6k+ votes
    1y

    Is it possible?  Yes.  My wife and I have more than replaced our corporate income.  We both made more than six figures in the corporate world.  Is it all about cashflow?  No. IMO, that is 100% incorrect.  

    If I had to break it down, I would say these are two important points.  

    1) You want your money to make high rates of return with low risk.  You can do that in real estate if you know what you are doing.  

    2) But, investing in real estate is not like having a job. The income does not come in regularly. It is "chunky".  You might have months and years with very little coming in and others where you are raking it in.  You always also need to keep enough of a cash cushion to survive the (all to frequent) black swan events.  We have done that, and you can do that, by being conservative with expenses and cash reserves.  From that perspective, cashflow is very important.

    Where are we now?  The last year the cashflow from our investments (not including capital gains) was 2x our combined salaries from 2018. (My wife was the first to leave the corporate world in 2019.)  However, at this time we pay almost nothing in income tax, due to all the tax incentives provided to RE investors by congress, so we get to keep almost all that, while before we lost about 40% of our salaries to taxes.

    4Reply
  • John J Kelly III
    OP
    Member since 2024 · 18 posts · 8 votes
    1y

    @Greg Scott very insightful, thank you.  I hear all these wild success stories yet here I sit with 400k ready to goto work and I feel like it won't do a thing.  Maybe it'll get me $1000/mo in cash flow.  

    What also interests me a lot, is the tax advantages of REI. Straight W2 we get crushed. Cash flow, appreciation and tax advantages definitely would be a nice step in the right direction.

    0Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y
    Quote from @John J Kelly III:

    I've listened to so many podcasts, read the books, spent wayyy too much time on this forum all in an effort to educate myself about REI and specifically SFH vs Multi. Just today, 5 different podcasts discussing how people started with 0 and now have 80, 100, 500, 800 and even 1000+ doors. They all talk about financial freedom, cash flow, appreciation and all the good stuff, even so much as some starting with very little money of their own. Many have reached their "financial freedom" which is my goal. So what's missing in all these podcasts and forums?? No one mentions the cash flow. Everyone has crunched the numbers and to get about 20k per month in cash flow you need 50+doors and about 20mil in RE. 20mil in RE means a ton of $$ down. Unrealistic for all of us.

    So, is anyone willing to give numbers?  My cashflow is $20,000/mo with 30 doors and about 400k in cash for down payments, etc.    The podcast today, popular guys with a well known podcast, they have 80 doors but not once mention cash flow.

    I'm concerned my goal of 20k cash flow is unrealistic.  Of course it won't happen over night but is it possible?  People mention 1000+ doors but never mention the cash flow. 

    That's my mini rant of the day.  


     I do not believe anything many of these podcasters say. I know several who do what we do and they all talk a big game but everything is at a 30,000 foot level that you could find off chatgpt and many do not give numbers because they actually are full of it on where they are really at. 

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    • Jay HinrichsBusiness Member
      Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
      1y
      Quote from @Chris Seveney:
      Quote from @John J Kelly III:

      I've listened to so many podcasts, read the books, spent wayyy too much time on this forum all in an effort to educate myself about REI and specifically SFH vs Multi. Just today, 5 different podcasts discussing how people started with 0 and now have 80, 100, 500, 800 and even 1000+ doors. They all talk about financial freedom, cash flow, appreciation and all the good stuff, even so much as some starting with very little money of their own. Many have reached their "financial freedom" which is my goal. So what's missing in all these podcasts and forums?? No one mentions the cash flow. Everyone has crunched the numbers and to get about 20k per month in cash flow you need 50+doors and about 20mil in RE. 20mil in RE means a ton of $$ down. Unrealistic for all of us.

      So, is anyone willing to give numbers?  My cashflow is $20,000/mo with 30 doors and about 400k in cash for down payments, etc.    The podcast today, popular guys with a well known podcast, they have 80 doors but not once mention cash flow.

      I'm concerned my goal of 20k cash flow is unrealistic.  Of course it won't happen over night but is it possible?  People mention 1000+ doors but never mention the cash flow. 

      That's my mini rant of the day.  


       I do not believe anything many of these podcasters say. I know several who do what we do and they all talk a big game but everything is at a 30,000 foot level that you could find off chatgpt and many do not give numbers because they actually are full of it on where they are really at. 


      reality is there are very few that actually live off of cash flow with max leverage .. they need to keep working and NOT take a dime out of the rents lest they find themselves in major financial trouble. positive cash flow with max debt for 90% plus investors needs to be saved or ploughed back into cap ex   reserves or pay down debt.. you get wealthy in RE over time and when your debt starts to fall away. Clients of mine that live on cash flow have either zero debt or very little..  My personal banker and I always talk about this when we go fishing.. the misconception of financially free on rentals.. I mean he banks nothing but entrepreneurs. 

      So in my mind change your goals.. forget the cash flow is going to set me free with max debt its not realistic at todays prices and interest rates. 

      I have clients that own well over 100 rental units and none of them take a dime out of cash flow in many cases they still need to feed the portfolio from time to time to keep it healthy. But once these get paid for they will be very rich.
      Podcast Guest on Show #222
      JLH Capital Partners51 Review
      WebsiteView Page
      4Reply
  • Priyank Yagnik
    Real Estate Agent · Plano, TX · Member since 2022 · 9 posts · 5 votes
    1y

    For simple version without big hoopla, read Coach Carson's book - small and mighty investor. I haven't finished the book yet but feels like the book is written for everyday routine guy like me, starting small and build. Simply put, slow and steady wins the race - is the gist of the book. Worth a try if you haven't read. And yes he does talk about cash flow. 

    2Reply
  • Doug P.
    Investor · Kitchener-Waterloo, Ontario · Member since 2008 · 1k+ posts · 1k+ votes
    1y

    @John J Kelly III There's no cash flow for rentals at all in my market. If I bought a house cash my net income would be 50% less than putting that money into a money market fund. The only reason to buy rentals here is praying that appreciation beats inflation.

    I had to make the choice between cash flow and appreciation and I decided to give up appreciation to maximize cash flow, so I've been selling on terms instead of renting since 2002. Even back then local landlords were delighted if they could get $30-$40/door while I was getting $300. Sure if they held that entire time they've got a boatload of equity. But if they don't sell they'll never enjoy it.

    Honestly what's the point of dying with tens or hundreds of millions of dollars in equity when you couldn't enjoy your life because you still had to work to have income?

    0Reply
  • Nicholas L.Pro Member
    Flipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
    1y

    @John J Kelly III

    i have a bunch of responses to this.

    -it depends on what you mean by cash flow.  there are multiple benefits to real estate as you know.  for example, i'm in the sweet spot where i have passive losses from my portfolio that help reduce the taxes on my W2 income.  Is that cash flow?  I think it is, it just comes at tax time every year instead of monthly.  

    -another way to cash flow is to buy a few units, and sell one.  is that cash flow?  i think it is.

    -they mostly only highlight the success stories on the podcasts.  not everyone succeeds.

    -it's gotten harder to "cash flow" with the increase in interest rates.  a lot of the most successful investors bought when rates were much lower.

    -i have no idea if your goal of 20K is realistic or not.

    -i have units that i break even on, but where I'm building equity, and so i'm very happy with that.  i also have one condo that i net about $350 a month on.  i almost never have repairs, and my interest rate is 4.125%.  

    hope this helps

    1Reply
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