Average Net Cash Flow ? (Per door)

95 Replies

Hi all,

I know there's CAP rates, ROI / NOI, 1% rules, but in terms of cold hard dollars, I'd be fascinated to know what you average real life positive cash flow per door is, on average, per month. I'm just asking for my own selfish motivation / inspiration and to dial in a buy and hold strategy. It can be without expenses for simplicity sake. Or included.

Simply put: per rental do you get $100-$500 net cash per month? (Example dollar amount)

I'd prefer SFR examples, because obviously larger apartment deals while really juicy are also at a scale I myself cannot yet reach.

I’m also curious for those who have achieved early FI how many doors it took.

I tried to see if already on a forum but didn’t see it, so thanks in advance if you do respond!

Originally posted by @Nate Sanow :

Hi all,

I know there's CAP rates, ROI / NOI, 1% rules, but in terms of cold hard dollars, I'd be fascinated to know what you average real life positive cash flow per door is, on average, per month. I'm just asking for my own selfish motivation / inspiration and to dial in a buy and hold strategy. It can be without expenses for simplicity sake. Or included.

Simply put: per rental do you get $100-$500 net cash per month? (Example dollar amount)

I'd prefer SFR examples, because obviously larger apartment deals while really juicy are also at a scale I myself cannot yet reach.

I’m also curious for those who have achieved early FI how many doors it took.

I tried to see if already on a forum but didn’t see it, so thanks in advance if you do respond!

 My 3 SFRs avg real numbers: 

I get $1075, 871 and 617 each door for a total of $2563 on those doors.  

My long term strategy is buy-and-hold, and I Recast every couple of years.  I also use Cashflow to invest in more SFHs.  

@Nate Sanow

Most of my SFH, bought 2 years or more ago cash flow 400-500 per month. Today's investments cash flow around 300. Should have gobbled up more properties when I had the chance. I remember complaining about paying more 80K for a property. Now we can't find anything under 100K.

Hope this helps.

you forgot one very important qualifier.  How much cash is in...as in how much of a down payment was put up, and how much is financed.  Makes a huge difference.

$850 per door is my average. However that comes from time and patience. Upon initial purchase, most of mine are nowhere close to that.

I have some SF units pulling $900 or more per door with debt. If your doing low volume of deals I look for larger dollar per door, where is at higher volume I’m happy with $200+ per door with debt. That’s reallly where I like being, I rather buy 100 doors at $200 per door, than 10 for $900... get decent cashflow today, and the wealth tomorrow type thing.

We buy dozens of SF units each month in one arm of my real estate business, which can include the low volume hard rehabs, or high volume turkey style properties.

At the sametime I’m also investing my cash into MF directly myself, or via syndications. 

All you got in this world is time and money, it’s up to you to decide how you want to spend it. 😉

I'm looking at a deal right now that is a 55k purchase price and rents for $875. I would have around 60k in the deal with no major repairs. I would save half of the rent for repairs, vacancy and general maintenance. Taking home around $400 to save for my next deal. 

@Kenneth Garrett

I have a ton of “shoulda woulda” and a “wish I didn’t”.

Good for you to get to where you are. Thanks for sharing.

@Joe Villeneuve

Sure, I see your point and agree, but I guess I’m flexible there.

@Russell Brazil

That is an incredible number, thanks for sharing. I’d imagine it does take a ton of patience.

@Levi T.

Agreed on all fronts. MF is where I think most people head but SF is still a good place to start. Thanks for sharing!

@Angel Arr

That’s absolutely brilliant and I hope it works out for ya! Thanks for sharing. Sounds like your path is bright.

@Nate Sanow

I have one at $495 one at $595 and a duplex at about $600 per door

@Jagrut Patel

I’ve buying in Lake and McHenry County and Southern Wisconsin.  In Lake County I stay away from Waukegan, North Chicago and Zion.  They are definitely distressed properties. I rehab them flip ready in case we want to sell one.  Just another exit strategy.  We are forcing appreciating when we refinance.  This is probably a much different strategy then most, but it works for us.  In the end we are able to attract high quality tenants and higher rents.

I agree with @Joe Villeneuve regarding the additional metrics. @Nate Sanow I looked at a deals for a guy last week and he was reflecting cash flow of $208.75 in month two of having a tenant. 

I said I don't see at what point in the timeline you Break-even and actually start making money, He asked what I meant, he said I get a tenant in the second month in my analysis, that's when I start to cash flow. I told him until you get all of your initial cost (closing cost, purchase cost, down payment, etc..) You don't have any cash flow, you have reimbursed owner funds received from rent in the amount of $208.75, you basically prepaid the rent for the tenant at closing and they are paying you back in monthly installments until all of your cash is out of the deal.

I showed him he doesn't have true cash flow until year 7 on the deal when he gets his $18,800 in cash out of the deal (down payment, closing cost, etc). With the caveat that he doesn't have to purchase a CapEx items early based on monthly set-asides or rehab a trashed property beyond normal wear and tear.

So in Joe's defense, your question is asking for "Net Cash Flow" which will include the need to factor in all cash initially invested being out of the deal. A person with a property in year 1 or 2 saying they have $400 a month in cash flow means they are missing a key metric in the information they are giving you unless the deal was100% financing and the only cost they paid out of pocket is the inspection cost, appraisal cost, and closing cost.

If you're doing a BRRR the timeline gets shorter to start cash flowing but most deals do not cash flow early on.

@Matthew McNeil very good numbers. I guess no debt, 2. Management feed 3. Cap ex withholding?

Originally posted by @Nate Sanow :

@Joe Villeneuve

Sure, I see your point and agree, but I guess I’m flexible there.

 It's not a matter of being flexible.  Either it is or it isn't.  The cash flow will (should) be higher if you put up more cash upfront...however, as @Ray Johnson so accurately put, that higher cash flow is deceiving. 

@Nate Sanow we typically put 25% down for our multis here in Oakland and are averaging $1000/door/month in cash flow after PITI, and around $500/door/month after accounting for everything else (maintenance, cap-ex, mgmt)

@Saj Shah that's pretty cool.  Let me get ready and maybe I'll holler at you begging you to let me buy one of those :)  

@Nate Sanow I'm right around $400 a door. When I'm looking at new deals my minimum is about $300 a door. Anything less than that and I'd risk losing a years worth of income to a bad hot water heater. This is small multi family or SFR. There might be some large scale apartment deals out there that make sense at $100/door.

@Ray Johnson i don’t know if I agree with you point on net cash flow, because putting cash in and getting money back it the definition of investing. The goal of cash flow is not to get the cash back that I invested, it’s to create a flow of money in. I see what you are saying though. It’s been established we can’t compare everyone’s answers apples to apples. For example the guy making 500/door isn’t definitely doing any better than the guy at 300/ door. More variables, other than just “cash in” is going to skew numbers in either direction. It is still a metric we use to measure the amount of cash coming in each month and it is still interesting to see what others are experiencing in their business.

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