What is your monthly cashflow?

Question

I'm just curious what kind of monthly NET cashflow everyone's built up - and where their properties are:

I'll start

Type:       City:                       NET Cashflow:
3 family - Springfield, MA         $200
4 family   Denver, CO              $250
Duplex     Colorado Springs      $100

TOTAL - $550 NET

What are you guys experiencing?
As always - thanks for all your guys' input - this board has been a great resource for me.

Frank Adams · Answer

Not applicable, there is NO MORTGAGE on the property except the one the buyer gives me when he buys. I paid off all of my Houston units in the early '90s, since then everything I've purchased I've paid cash for. Hence my name on this site.

In order for leverages (mortgage) to be effective in building your portfolio, you must be assured of PRICE APPRECIATION in excess of the underlying interest rate. I live in TX where appreciation runs about 2%-3%/year (I had a guy dispute this to me on another site today, but he was citing statistics covering the last THREE YEARS). Taking out a mortgage COSTS EXTRA MONEY, slows down your ability to deal and IMO prevents me from doing deals MY WAY.

BTW, my mortgages do have DOSs in them, and I'm always intimately aware of what's going on with my units.

all cash

Derek Guyer · Answer

DOS= "Due on sale"

This means if ownership of the property is transfered to someone else other than the borrower, the total amount due on the loan must be paid immediately.

TK Herrin · Answer

bsodders05

I'm a newbie and was reading through some posts.  What is "the DOS" clause?

TK Herrin · Answer

Thanks, that would be important to know because I have been researching holding properties in LLCs/Roth IRAs

N/A N/A · Answer

All Cash

Do you ever worry about the DOS clause?  I hear that mortgage companies generally don't get involved as long as the payments roll in, but what if?

I assume you have cash reserves established, but have you ever had a problem before?

Thanks

Frank Adams · Answer

Hi danno;

I got started in 1978 when a job in Houston took me away from the SF Bay Area just prior to the prop. 13 election.  The next two houses that I lived in I kept when I moved. When the bottom fell out of the RE market in Houston in the '80s I dumped one of them but held on to the other. BTW, during the downturn the AVERAGE house in Houston LOST ABOUT 1/2 ITS VALUE.

In '87 I started buying again, some REOs, some HUDs, some "distressed looking places from owners who were behind in payments. I slammed every extra dollar I had onto principal to eliminate debt (and extra expense) and had 16 places (that includes 6 that I owned 1/2 of each unit with family or friends). Leverage only works in APPRECIATING markets and the market in TX is VERY FLAT, about 2%-3%/year.

When I decided to move out of Houston I started to sell them off as leases ended. I sold two to tenants. I always sold for above market price and a bit above market interest rate. I charge a small down payment (usually $2K), charge $300 or so for document preparation, which I do myself. I've had pretty good success, although I'm in the process of my third foreclosure (cost about $1100 each time), but the previous two I sold for $3K and $20K more than I had the first time I sold them!

I do not do any rentals anymore, TX is a tough market for rentals. I look for deals within about 15 miles of where I live. Although I'm sure there are lots of deals in San Antonio (about 75 miles) and Austin (about 55 miles) I'm not going to spend my time driving to check out and then to do the work, then to sell.

all cash

N/A N/A · Answer

WOW - you really ARE enjoying financial critical mass !

How did you get started?  Do you still own any rentals?  DId you hold them until they're paid off and then sell them (and finance the mortgage)?  Where are you looking for your next deals?

Forgive the barrage of questions but your input would be greatly valued by ALL of us.

-danno

Frank Adams · Answer

Currently at $4578/month, but will drop $825/month when one sells one Feb. 6th. Three years ago it was $7900/month. I definitely need to find a couple of deals to amp that a bit.

BTW, those are seller financed mortgages, not rents.

all cash

Jim Francis · Answer

Seems like a good start to me.  I'm still waiting for my first cash-flow property, so I'm making zero.  I'm planning on finding a way to pick up at least 2 properties this year, though.

What is your monthly cashflow?

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