One property high cash flow, or multiple properties with low cash flow?

1 Reply

Complete newbie here, but I'm struggling to understand the advantage of multiple properties that have small cash flow (due to loan repayment) vs a single property that is debt free with large debt flow.  Granted you can "control" more assets, but couldn't you parlay the large cash flow into another debt free property down the road that is also giving you high cash flow?  Everything I've heard and seen on the site so far, seems to suggest that you should keep acquiring as many properties as you can so long as they can generate enough cash flow to pay for themselves and give a modest return.  I'm sure I'm missing something, just curious what it is.  Thanks in advance for you consideration!

@David Burgess

Its a catch 22.  I have about 20 rental homes all financed.  I have about 11 of them on 15yr notes so my cash flow after mortgage payment and property mgmt is very low.  Some only cash flow about $125 per month so if I have really 1 maintenance item I am at break even or zero cash flow and if I have more then 1 vacancy I am nervous.  

I understand about controlling multiple homes but there is also something to be said about owning a home paid off in the clear.  I guess it would depend on how low the cash flow is.  

If you can get at least $250 in cash flow after mortgage and mgmt then finance.  

Good luck

Curt Davis, Real Estate Agent in TN (#00321765)

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