What is a good cash flow goal on a no money down deal?
I currently work with a local portfolio lender. I have a history with them, and they typically will have no problem with lending me 100% of the purchase price for small SFH's that have very low purchase prices ($25k - $40k). The bank has trust in me that if I make an offer on the property then the rental income will cover the mortgage, and even if it doesn't, I have plenty of disposable W2 income to cover the payment. Also, there are a good bit of these types of SFH's in my area. Basically, with this lender, I can pick up decent rental properties with no money down pretty easily.
Here is my issue. I typically set a cash flow goal of $150-$200 per door. However, when I run the numbers (accounting for all expense) on these small SFH's it is very hard if not impossible for me to hit this cash flow goal with no money down. I can usually get $80 - $100 pretty easily but not much more.
My question is should I be willing to lower my per door cash flow goal, considering that I will have no money into these house? Or should I just pass on these houses regardless?
I'm sure people are going to have different strategies and thoughts. I'm interested in all points of view.