Seems to me Biggerpockets Dealfinder is useless

[Jonathan Warner]

I've manually underwritten some deals taking into account property taxes, CapEx, and annual maintenance and have found that almost every "cashflowing" deal on the Biggerpockets Dealfinder to be a non-cashflowing deal. Am I missing something? Maybe I'm underwriting too conservatively? But it seems to me that this is a potentially dangerous tool for newbies who might not know any better to lose a lot of money...

[Jay Hinrichs]

Quote from @Nicholas L.:

@Jonathan Warner

i haven't looked at the Dealfinder, so I am not familiar with it and can't comment on it.

but, it sounds like you're not missing anything.  most deals right now will not cash flow, and new investors tend not to be conservative enough.  

in general, only the higher risk / more creative niches are going to cash flow right now.  vanilla LTRs don't.  now, to be clear, that doesn't mean they're not a good long term investment.  they are- there are other benefits to RE than just cash flow.

i'm under contract right now on a property i plan to BRRRR, and... it's not going to cash flow when i'm done, it's going to break even. but that's just fine with me.

I think for today's market one has to define IT WONT CASH FLOW .. what does that mean?
IE no positive cash flow with MINIMUM down maximum leverage.. Is that why ?
Most everything cash flows when you pay CASH.. So think you have to start there and work backwards.. If the goal is to have NET NET NET operating income on a rental. One needs to work the numbers back from paying cash to how much down will create the amount of NET NET NET one is trying to achieve.  Now I get it in markets that have very slow to meager appreciation there is little reason to buy rentals if you cant get some cash flow with high leverage but in other markets cash flow really is not the main concern the main concern is just getting in the game and how much can you afford to feed it with the capital you have to put down.

Personally I think it is about 30 seconds to underwrite SFR.. take gross rents use 50% for operating expenses then deduct mortgage payments and see where you land.. if its close look at it harder if you miss by a mile then move to the next. Going to have to look at a lot of deals on deal finder to find anything that works same with wholesalers  MLS etc etc.

Bottom line is investors from 2010 till the rates jumped a few years ago were spoilt rotten  with being able to cash flow with Max Leverage that is not how it was before the GFC and it is not returning anytime soon.. at least IMHO  your mileage may vary. So bottom line today you may need 30 to 40% cash down to cash flow positive as that is the reality of the market and the mortgage market.