Whats the difference between a cashflow investor and. Long term investor its it the same as a cashflow investor or equity investor?
HI @Oskar Plasencia
I think the terms are often used incorrectly. Almost everyone should be in this game to see at least a little positive cash flow if they are buying rentals. Some people like to focus on markets that don't appreciate as much, but that provide more cash flow. Other people like markets where there is strong appreciation over time. Typically, strong appreciation markets don't offer as good of cash flow numbers as lower priced markets (at least on paper).
I personally like the market where I live in the Chicago west suburbs (Berwyn) because it allows for a healthy mixture of cash flow and appreciation. Hope that helps!
Cashflow investor is only looking at the cashflow of the property, i.e. the monthly income. Generally, they don't consider any form of appreciation. Generally, they have a short term outlook, say 3-5-7 years down the road.
A long term investor is looking for a balance of cashflow (the property must support itself, and throw cash), and appreciation/neighborhood. A long term investor is generally looking 10-15-20-30 years down the road.
Neither of these is hard and fast. For example, a cashflow investor may be looking further down the road, but is looking for above average cashflow to re-position, improve, or otherwise enhance a property to hold it long term.
Hope that helps.
Jonh warren,James C.
Thanks for reaching out,i had trouble finding a clear definition now I have a clear understanding
Long term investor I would equate to more so looking at equity in the property for big gains 5-10 years down the line. Cash flow I would say is more looking at returns for rent and cash on cash
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you