Average Net Cash Flow ? (Per door)

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Average Net Cash Flow ? (Per door)

Nate Sanow
I​nvestor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes

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!

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Ray Johnson
Irvine, CA · Member since 2016 · 545 posts · 614 votes
7y

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.

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  • Matthew McNeil
    Rental Property Investor · Boise/Portland · Member since 2017 · 709 posts · 742 votes
    7y
    Originally posted by @Nick S.:

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

     All net #s.  LTVs are 0%, 51% and 21%

    3Reply
  • Francisco Lopez
    Belvidere, IL · Member since 2018 · 9 posts · 7 votes
    7y

    @Kenneth Garrett May I know why you don’t got to the Waukegan area? Also what do you think about Rockford?

    2Reply
  • Rich WilkenPro Member
    Investor · Antioch, IL · Member since 2017 · 41 posts · 12 votes
    7y

    @Nate Sanow we are anywhere between $800 and $1100 per door in positive net cashflow. We put 20-25% down, complete repairs out of pocket, and refinance everything back out into 30 year loans.

    4Reply
  • Elenis Camargo
    Property Manager · Jacksonville, FL · Member since 2018 · 514 posts · 470 votes
    7y

    @Nate Sanow We have 3 SFH. After all expenses including adding vacancy loss percentage and putting some away for maintenance, here is the cash flow.

    Property 1: $381

    Property 2: $344

    Property 3: $250 (This one we just acquired last week. We will rehab next year then sell. It came with a tenant and the rent is lower than market right now)

    2Reply
  • Curtis Mears
    Property Manager · Raleigh, NC · Member since 2014 · 728 posts · 596 votes
    7y

    @Nate Sanow

    for 2018, about $1,100 per house. but that only includes the properties held for more than 12 months. if I include properties purchased and rehabbed in 2018, number drops to $678 per property. but it should be back over $1,100 next year unless I buy and rehab more.

    0Reply
  • Douglas Bourque
    Investor · Dunnellon, FL · Member since 2014 · 8 posts · 0 votes
    7y

    @Elenis Camargo where in Jacksonville are you investing? Could you share the zip codes? How much cash do need to have in each property to get these numbers?

    0Reply
  • John MorganPro Member
    Rental Property Investor · Grand Prairie, TX · Member since 2018 · 2k+ posts · 2k+ votes
    7y

    An average of $200 per SFR for me. That's with 20% down, with 15 year loans and purchased within the last two years. I'm doing a rehab now that should net me $800/month when it's completed and rented at market rate in a sec 8 housing area.

    1Reply
  • Antuan La
    Rental Property Investor · Member since 2019 · 7 posts · 1 vote
    7y

    @Angel Arr

    That’s not bad. I’m looking into a duplex listed for 37k that produces 750 a month. Calculated the CoCROI being 27% on that. Which I think it’s pretty good.

    0Reply
  • Aubrey Powell
    Investor · Buffalo, NY · Member since 2015 · 2 posts · 2 votes
    7y

    In Buffalo N.Y i Average around $750 a door free and clear.  Investments that has a mortgage with 20% down is an average around $500 a door. This includes cap ex and windows many windows. It's very important to price windows with older built properties.

    2Reply
  • Courtney Vitek
    Property Manager · Houston · Member since 2019 · 6 posts · 8 votes
    7y

    @Nate Sanow https://www.naahq.org/news-publications/units/september-2018/article/survey-operating-income-expenses-rental-apartment

    Hope this helps!

    1Reply
  • Sergio Aguinaga
    Detroit, MI · Member since 2018 · 148 posts · 38 votes
    7y

    @Kenneth Garrett how are you guys getting over 700 in cash flow per month?! I thought the rule of thumb was that for a SFR, it's 200 dollars and for a multi family, it's 100 dollars per unit and it was considered ok. If a home costs 100,000 and you put down 20%, and for simplicity the expenses are 50% of rent, let's say renting at 1500 (which is solid), and a fixed rate mortgage at 5% for 30 years comes out to 430 a month for principle and interest. So expenses of 750 + 430 = ~1200 per month. That would equate to ~300 in cash flow per month and that's with a 20% down payment which is a lot and makes the cash flow higher since mortgage payment per month is less. How are you guys finding deals that such that this 80,000 will have rents up to 2,000 per month. It just seems very inflated but I'm impressed that you're able to do that. This is why I'm in this game haha.

    5Reply
  • Jose J Nazario
    Member since 2019 · 5 posts · 2 votes
    7y

    @Matthew McNeil wow! That's pretty good. Is this what's left after paying the mortgage or are they paid off? I have two properties and have $0 cash flow. I have acquired some equity over the years. Looking to raise the rent soon.

    2Reply
  • Matthew McNeil
    Rental Property Investor · Boise/Portland · Member since 2017 · 709 posts · 742 votes
    7y
    Originally posted by @Jose J Nazario:

    @Matthew McNeil wow! That's pretty good. Is this what's left after paying the mortgage or are they paid off? I have two properties and have $0 cash flow. I have acquired some equity over the years. Looking to raise the rent soon.

     Hi Hose, as I posted above; All net #s. LTVs are 0%, 51% and 21%

    1Reply
  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    7y

    50% rule is a good one to look up to determine a baseline number that can work out well.

    0Reply
  • Kenneth GarrettPro Member
    Investor · Florida Panhandle/Illinois · Member since 2016 · 4k+ posts · 3k+ votes
    7y

    @Sergio Aguinaga

    In today's market if you can get $300 cash flow on a SFH that's a good win. The only way to get $700 and up is if the property is paid off. Most properties in my area have property taxes between 3K-4K. Add insurance and other expenses $700 works, but only after paid off.

    Good Luck.

    1Reply
  • Elenis Camargo
    Property Manager · Jacksonville, FL · Member since 2018 · 514 posts · 470 votes
    7y

    @Douglas Bourque PM me  :)

    0Reply
  • William Powers
    Waukegan, IL · Member since 2014 · 75 posts · 35 votes
    7y

    Our average cash per door is $490 per month on 200 units, mostly single family. We don't have a lot of debt on these units, 60% LTV, which keeps the cash flow higher, but that is about 100% of total investment in the property, if not a bit more-cash out refi after holding for 3-5 years. Initial loans were less.

    I invest mostly in Waukegan, Beach Park and Libertyville. Zion is next with only 15 units but the taxes are too high in this community so I tell everyone to stay away from this town. 

    1Reply
  • Matthew Irish-JonesBusiness Member
    Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
    7y

    @Aubrey Powell what neighborhood are you getting these figures in?  $500 per door with a mortgage?  $1,000 per month on a double?  

    I am not seeing these numbers.  

    Irish Jones Realty4.947 Reviews
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    2Reply
  • Nancy P.
    Naperville, IL · Member since 2018 · 330 posts · 357 votes
    7y

    We own 8 condos and 2 halves of duplexes.  We own six of them outright,  4 mortgages.  After PM fees of 10%,  condo fees,  real estate taxes, and mortgage,  we average $427 per door.  Naperville IL area.

    0Reply
  • Derek SperzelPro Member
    Rental Property Investor · Jeffersonville, IN · Member since 2012 · 72 posts · 40 votes
    7y

    @Nate Sanow We want a minimum of $150 per door on leveraged properties @ 75% LTV (via BRRRR, delayed financing). We focus on SFR, and here is a breakdown of our cash flow calculations:

    $150 minimum per month for CAPEX (more if they aren't completely renovated with new mechanicals)

    $50 for R&M

    5% Vacany

    10% MGMT (plus half 1st months rent, so usually 12-14%)

    Property Tax

    Insurance

    P&I

    2Reply
  • Syed H.
    Developer · NY/NJ/PA · Member since 2018 · 758 posts · 935 votes
    7y
    Originally posted by @Ray Johnson:

    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,         

    This makes absolutely no sense. 

    4Reply
  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    7y
    Originally posted by @Syed H.:
    Originally posted by @Ray Johnson:

    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,         

    This makes absolutely no sense. 

     What part don't you get?

    0Reply
  • Andrew Flora
    Rental Property Investor · North Vernon, IN · Member since 2018 · 136 posts · 192 votes
    7y

    I get $200-300 per door on my SFH but it's a lower ROI long term. I have some larger MF deals only doing $50-100 per door but will generate great long term wealth. Sometimes I play for supplemental income, sometimes I play for wealth/equity gain. Depends on the deal.

    0Reply
  • Christina Linn
    Investor · Member since 2017 · 83 posts · 46 votes
    7y

    @Nate Sanow my SF are $550, $875, $425, $250. They are all very different deals and price points though. They are all on 25 year ams with 20% down. I’ve listed cash flow after fixed expenses and without any extra expenses.

    2Reply
  • Syed H.
    Developer · NY/NJ/PA · Member since 2018 · 758 posts · 935 votes
    7y
    Originally posted by @Joe Villeneuve:
    Originally posted by @Syed H.:
    Originally posted by @Ray Johnson:

    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,         

    This makes absolutely no sense. 

     What part don't you get?

     I get it, it just makes no sense. An investments cash flow isn’t judged by being paid back your equity first. That’s not how investments are evaluated and compared by most people, and def not by most professional shops. 

    Anyways, I net $210/unit on my MF portfolio. 

    That’s with 25% down. Taking into account vacancy, mgmt, regular expenses, reserves, repairs, and my mortgage. Principal reduction isn’t included.

    5Reply
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