I'm losing motivation, can't find anything that works.

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I'm losing motivation, can't find anything that works.

Steve Balinski
Roselle, IL · Member since 2016 · 131 posts · 31 votes

Hello everyone, I need some motivation.  I've been an investor for about 8 years. Done a couple flips and currently own a 4-unit and a 2-unit.

I haven't looked at properties in a long time due to interest rates killing any potential deal in my area (SE WI).  Instead of looking for a multi-unit, I started calculating Single Family properties to see what it'd take to make my #'s work.

230,000 starting price (3bd 1.5bth, very low price for this area).

$1900 rent

$4k Taxes

$1500 insurance

$3k all maintenance

20% down

4% interest rate (just to see if even this would hit my #'s.

RESULT = $220 cash flow :-( :-(

How are you all finding single family properties that work?  My target is $500 cashflow, I'm not even close.

I'd even consider 2-4unit, but I know my numbers are even further away.
:-(

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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
1y
Quote from @Steve Balinski:

Hello everyone, I need some motivation.  I've been an investor for about 8 years. Done a couple flips and currently own a 4-unit and a 2-unit.

I haven't looked at properties in a long time due to interest rates killing any potential deal in my area (SE WI).  Instead of looking for a multi-unit, I started calculating Single Family properties to see what it'd take to make my #'s work.

230,000 starting price (3bd 1.5bth, very low price for this area).

$1900 rent

$4k Taxes

$1500 insurance

$3k all maintenance

20% down

4% interest rate (just to see if even this would hit my #'s.

RESULT = $220 cash flow :-( :-(

How are you all finding single family properties that work?  My target is $500 cashflow, I'm not even close.

I'd even consider 2-4unit, but I know my numbers are even further away.
:-(


 As mentioned, you are not going to find that cashlow on an asset unless its in a class D area and on paper it may show that but reality is it wont cash flow.

We are back to a more realistic real estate market that has been more like this the last 50 years than what the last 5 years was providing which means - real estate is not easy, its hard and you hve to really find the good deals. But its also a long term play where you are going to make money over long period of time and not in 12 months like we saw the past few years.

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  • Theresa HarrisPro Member
    Member since 2019 · 15k+ posts · 11k+ votes
    1y

    Have you tried looking at longer term mortgages (eg 30 year)?

    0Reply
    • Steve Balinski
      OP
      Roselle, IL · Member since 2016 · 131 posts · 31 votes
      1y
      Quote from @Theresa Harris:

      Have you tried looking at longer term mortgages (eg 30 year)?


       Yes, my calculations are all based on 30yr mortgages

      0Reply
    • Steve Balinski
      OP
      Roselle, IL · Member since 2016 · 131 posts · 31 votes
      1y
      Quote from @Theresa Harris:

      Have you tried looking at longer term mortgages (eg 30 year)?


       yea its calculated at a 30yr

      0Reply
  • Caleb Brown
    Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
    1y

    $500 is a unicorn and near impossible on a 200K SF. You can rehab type deals so you aren't sinking 20% down into every property. BRRRs aren't going to cashflow a ton but you recycle your cash so your money can go further, this will be a higher return on the money you invest. There is more risk and moving parts but can be done. The market is different now, when you bought rates were dirt cheap so anything did fine. 

    1Reply
    • James Hamling
      Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
      1y
      Quote from @Caleb Brown:

      $500 is a unicorn and near impossible on a 200K SF. You can rehab type deals so you aren't sinking 20% down into every property. BRRRs aren't going to cashflow a ton but you recycle your cash so your money can go further, this will be a higher return on the money you invest. There is more risk and moving parts but can be done. The market is different now, when you bought rates were dirt cheap so anything did fine. 

      "$500 is a unicorn..."

      I guess that would make me a:
      0Reply
  • Nadeem Alamgir
    Real Estate Agent · Member since 2023 · 831 posts · 577 votes
    1y

    Hey Steve, a lot of investors are feeling it right now with rates and prices where they are. Some are finding better cash flow by searching to more investor friendly or out of state markets where the numbers still work, especially on small multi or light value add deals. You've already built a solid foundation so it might just be time to shift markets or strategy for the next one. 

    0Reply
    • Steve Balinski
      OP
      Roselle, IL · Member since 2016 · 131 posts · 31 votes
      1y
      Quote from @Nadeem Alamgir:

      Hey Steve, a lot of investors are feeling it right now with rates and prices where they are. Some are finding better cash flow by searching to more investor friendly or out of state markets where the numbers still work, especially on small multi or light value add deals. You've already built a solid foundation so it might just be time to shift markets or strategy for the next one. 

      Im curious what areas people are able to even make the numbers work.
      1Reply
  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y
    Quote from @Steve Balinski:

    Hello everyone, I need some motivation.  I've been an investor for about 8 years. Done a couple flips and currently own a 4-unit and a 2-unit.

    I haven't looked at properties in a long time due to interest rates killing any potential deal in my area (SE WI).  Instead of looking for a multi-unit, I started calculating Single Family properties to see what it'd take to make my #'s work.

    230,000 starting price (3bd 1.5bth, very low price for this area).

    $1900 rent

    $4k Taxes

    $1500 insurance

    $3k all maintenance

    20% down

    4% interest rate (just to see if even this would hit my #'s.

    RESULT = $220 cash flow :-( :-(

    How are you all finding single family properties that work?  My target is $500 cashflow, I'm not even close.

    I'd even consider 2-4unit, but I know my numbers are even further away.
    :-(


     As mentioned, you are not going to find that cashlow on an asset unless its in a class D area and on paper it may show that but reality is it wont cash flow.

    We are back to a more realistic real estate market that has been more like this the last 50 years than what the last 5 years was providing which means - real estate is not easy, its hard and you hve to really find the good deals. But its also a long term play where you are going to make money over long period of time and not in 12 months like we saw the past few years.

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  • Kasi V.
    Investor · Texas City, TX · Member since 2018 · 54 posts · 22 votes
    1y

    What about vacancy rates and leasing fees ? ...they can significantly impact your numbers. It's a good idea to use a standard spreadsheet or one of the online calculators. You can find one on BiggerPockets, calculator.net, rollytally.com or baselane ROI calculator.


    0Reply
    • Steve Balinski
      OP
      Roselle, IL · Member since 2016 · 131 posts · 31 votes
      1y
      Quote from @Kasi V.:

      What about vacancy rates and leasing fees ? ...they can significantly impact your numbers. It's a good idea to use a standard spreadsheet or one of the online calculators. You can find one on BiggerPockets, calculator.net, rollytally.com or baselane ROI calculator.



       I've got a very detailed calculator that includes all that and more.  

      0Reply
    • Steve Balinski
      OP
      Roselle, IL · Member since 2016 · 131 posts · 31 votes
      1y
      Quote from @Kasi V.:

      What about vacancy rates and leasing fees ? ...they can significantly impact your numbers. It's a good idea to use a standard spreadsheet or one of the online calculators. You can find one on BiggerPockets, calculator.net, rollytally.com or baselane ROI calculator.



       All accounted for in my calculations

      1Reply
  • John Clark
    Member since 2018 · 1k+ posts · 1k+ votes
    1y
    Quote from @Steve Balinski:

    Hello everyone, I need some motivation.  I've been an investor for about 8 years. Done a couple flips and currently own a 4-unit and a 2-unit.

    I haven't looked at properties in a long time due to interest rates killing any potential deal in my area (SE WI).  Instead of looking for a multi-unit, I started calculating Single Family properties to see what it'd take to make my #'s work.

    230,000 starting price (3bd 1.5bth, very low price for this area).

    $1900 rent

    $4k Taxes

    $1500 insurance

    $3k all maintenance

    20% down

    4% interest rate (just to see if even this would hit my #'s.

    RESULT = $220 cash flow :-( :-(

    How are you all finding single family properties that work?  My target is $500 cashflow, I'm not even close.

    I'd even consider 2-4unit, but I know my numbers are even further away.
    :-(

    What’s your appreciation potential? Appreciation comes at a cost. That cost is cash flow. 

    as others have said, you missed vacancy. The property doesn’t cash flow.
    0Reply
    • Steve Balinski
      OP
      Roselle, IL · Member since 2016 · 131 posts · 31 votes
      1y
      Quote from @John Clark:
      Quote from @Steve Balinski:

      Hello everyone, I need some motivation.  I've been an investor for about 8 years. Done a couple flips and currently own a 4-unit and a 2-unit.

      I haven't looked at properties in a long time due to interest rates killing any potential deal in my area (SE WI).  Instead of looking for a multi-unit, I started calculating Single Family properties to see what it'd take to make my #'s work.

      230,000 starting price (3bd 1.5bth, very low price for this area).

      $1900 rent

      $4k Taxes

      $1500 insurance

      $3k all maintenance

      20% down

      4% interest rate (just to see if even this would hit my #'s.

      RESULT = $220 cash flow :-( :-(

      How are you all finding single family properties that work?  My target is $500 cashflow, I'm not even close.

      I'd even consider 2-4unit, but I know my numbers are even further away.
      :-(

      What’s your appreciation potential? Appreciation comes at a cost. That cost is cash flow. 

      as others have said, you missed vacancy. The property doesn’t cash flow.

       Vacancy is included in my calculation. Agreed it doesn't cash flow.  Even with a 4% rate it doesnt cashflow which is my point, how the heck are people finding cashflowing properties. Even the taxes are low on this one. I can't imagine anywhere else these numbers working.

      0Reply
    • Steve Balinski
      OP
      Roselle, IL · Member since 2016 · 131 posts · 31 votes
      1y
      Quote from @John Clark:
      Quote from @Steve Balinski:

      Hello everyone, I need some motivation.  I've been an investor for about 8 years. Done a couple flips and currently own a 4-unit and a 2-unit.

      I haven't looked at properties in a long time due to interest rates killing any potential deal in my area (SE WI).  Instead of looking for a multi-unit, I started calculating Single Family properties to see what it'd take to make my #'s work.

      230,000 starting price (3bd 1.5bth, very low price for this area).

      $1900 rent

      $4k Taxes

      $1500 insurance

      $3k all maintenance

      20% down

      4% interest rate (just to see if even this would hit my #'s.

      RESULT = $220 cash flow :-( :-(

      How are you all finding single family properties that work?  My target is $500 cashflow, I'm not even close.

      I'd even consider 2-4unit, but I know my numbers are even further away.
      :-(

      What’s your appreciation potential? Appreciation comes at a cost. That cost is cash flow. 

      as others have said, you missed vacancy. The property doesn’t cash flow.

       I didn't mention every cost, but I did include them in my calculations.

      0Reply
  • Corby GoadeBusiness Member
    Investor · Boise, ID · Member since 2014 · 3k+ posts · 3k+ votes
    1y

    Sounds like you don't have realistic expectations for your market and ROI.

    I talk to newbies about this same thing all of the time- they've read a forum post or connected with some guru who has given them unrealistic expectations for what the market can do TODAY and it creates fear and inaction. 

    So worst case senario in your analysis above, you are making an extra $220 per month, someone else is paying down your debt and it's growing in value over time passively?

    For what it's worth, those numbers would be a killer deal in my market and I'd buy it myself. 

    I'm not saying you should buy THIS property, but I am saying this is a marathon, not a sprint. Wealth comes from holding assets over time and letting them grow and mature. If you are only paying attention to what they will do on the first month, you'll be sitting on the sidelines forever. 

    4Reply
    • Steve Balinski
      OP
      Roselle, IL · Member since 2016 · 131 posts · 31 votes
      1y
      Quote from @Corby Goade:

      Sounds like you don't have realistic expectations for your market and ROI.

      I talk to newbies about this same thing all of the time- they've read a forum post or connected with some guru who has given them unrealistic expectations for what the market can do TODAY and it creates fear and inaction. 

      So worst case senario in your analysis above, you are making an extra $220 per month, someone else is paying down your debt and it's growing in value over time passively?

      For what it's worth, those numbers would be a killer deal in my market and I'd buy it myself. 

      I'm not saying you should buy THIS property, but I am saying this is a marathon, not a sprint. Wealth comes from holding assets over time and letting them grow and mature. If you are only paying attention to what they will do on the first month, you'll be sitting on the sidelines forever. 


       Yes, agreed.  My strategy is cashflow though, trying to get out of my W2 job asap.  I have a 4 unit that cashflows $2000+/month that I bought for 275K move-in ready in 2017.  I know that's a pipe dream now, but even finding $500 for a SF seems impossible w/o a rehab needed.

      0Reply
  • Nadeem Alamgir
    Real Estate Agent · Member since 2023 · 831 posts · 577 votes
    1y

    I sent you a DM! @Steve Balinski

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    1y

    pretty simple solution just put more money down or pay cash.. that way everything cash flows..

    Cash flow with minimum down was a moment in time it was not the norm.. at least on the coasts were the coastal Elites live and invest.. I love that one Coastal Elites the media is now using in Politics .. like everyone who lives on the coasts is an elitist LOL

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  • James Hamling
    Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
    1y

    @Steve Balinski as your presenting things with no context of details such as asset class, tenant class, cap-x, appreciation etc., I have answers ready that match: 

    1009 7th Avenue S, Saint Cloud, MN 56301

    5bd, 2ba, 1680 sqft, Listing/Purchase Price $159,900 - Rent Range $1,830 mnth - Prop tax $1,852yr. 



    1016 12th Avenue SE, Saint Cloud, MN
    4bd, 2ba, 1,466sqft, Listing/purchase Price $226k - Rent Range $1,800mnth - Prop Tax $2,012yr



    19 Mckinley Place N, Saint Cloud, MN

    4bd, 3ba, 1,686 sqft - Listing/Purchase Price $169,900 - Rent Range $1,870 mnth - Prop Tax $3,100yr



    1007 6th Street N, Saint Cloud, MN
    4bd, 2ba, 1954sqft - Listing/Purchase Price $175k - Rent Range $1,910mnth - Prop Tax $1,874yr

    Need I go on ?...... 

    If a person is going to use tunnel-vision metrics of just looking at price sub $250k, rent's and prop tax and take 0 context otherwise..... 

    Dude, how many PER-DAY do you wanna buy? Serious. 1 a day, no problem. 2 a-day, I got you! 

    I can fire-hose these things...... 

    0Reply
    • Marcus Auerbach
      Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
      1y
      Quote from @James Hamling:

      @Steve Balinski as your presenting things with no context of details such as asset class, tenant class, cap-x, appreciation etc., I have answers ready that match: 

      1009 7th Avenue S, Saint Cloud, MN 56301

      5bd, 2ba, 1680 sqft, Listing/Purchase Price $159,900 - Rent Range $1,830 mnth - Prop tax $1,852yr. 



      1016 12th Avenue SE, Saint Cloud, MN
      4bd, 2ba, 1,466sqft, Listing/purchase Price $226k - Rent Range $1,800mnth - Prop Tax $2,012yr



      19 Mckinley Place N, Saint Cloud, MN

      4bd, 3ba, 1,686 sqft - Listing/Purchase Price $169,900 - Rent Range $1,870 mnth - Prop Tax $3,100yr



      1007 6th Street N, Saint Cloud, MN
      4bd, 2ba, 1954sqft - Listing/Purchase Price $175k - Rent Range $1,910mnth - Prop Tax $1,874yr

      Need I go on ?...... 

      If a person is going to use tunnel-vision metrics of just looking at price sub $250k, rent's and prop tax and take 0 context otherwise..... 

      Dude, how many PER-DAY do you wanna buy? Serious. 1 a day, no problem. 2 a-day, I got you! 

      I can fire-hose these things...... 


      James, are these student rentals?

      0Reply
    • James Hamling
      Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
      1y
      Quote from @Marcus Auerbach:
      Quote from @James Hamling:

      @Steve Balinski as your presenting things with no context of details such as asset class, tenant class, cap-x, appreciation etc., I have answers ready that match: 

      1009 7th Avenue S, Saint Cloud, MN 56301

      5bd, 2ba, 1680 sqft, Listing/Purchase Price $159,900 - Rent Range $1,830 mnth - Prop tax $1,852yr. 



      1016 12th Avenue SE, Saint Cloud, MN
      4bd, 2ba, 1,466sqft, Listing/purchase Price $226k - Rent Range $1,800mnth - Prop Tax $2,012yr



      19 Mckinley Place N, Saint Cloud, MN

      4bd, 3ba, 1,686 sqft - Listing/Purchase Price $169,900 - Rent Range $1,870 mnth - Prop Tax $3,100yr



      1007 6th Street N, Saint Cloud, MN
      4bd, 2ba, 1954sqft - Listing/Purchase Price $175k - Rent Range $1,910mnth - Prop Tax $1,874yr

      Need I go on ?...... 

      If a person is going to use tunnel-vision metrics of just looking at price sub $250k, rent's and prop tax and take 0 context otherwise..... 

      Dude, how many PER-DAY do you wanna buy? Serious. 1 a day, no problem. 2 a-day, I got you! 

      I can fire-hose these things...... 


      James, are these student rentals?


      No, not student rentals. 

      For Student rentals one usually wants to get one of the 7+ br homes, which are not all that hard to get right now if know the right people (this is a very serious comment, it's a very clicky-market and gotta know who's who to get a realistic buy or even a conversation)

      Student rentals generally go $350 - $500 mnth per room. 

      You wouldn't believe me if I told you what the last 7+br rooming house sold for.... $200k would have been enough to make the buy, kit-out the place, and then some....  It's crazy.

      0Reply
    • Steve Balinski
      OP
      Roselle, IL · Member since 2016 · 131 posts · 31 votes
      1y
      Quote from @Marcus Auerbach:
      Quote from @James Hamling:

      @Steve Balinski as your presenting things with no context of details such as asset class, tenant class, cap-x, appreciation etc., I have answers ready that match: 

      1009 7th Avenue S, Saint Cloud, MN 56301

      5bd, 2ba, 1680 sqft, Listing/Purchase Price $159,900 - Rent Range $1,830 mnth - Prop tax $1,852yr. 



      1016 12th Avenue SE, Saint Cloud, MN
      4bd, 2ba, 1,466sqft, Listing/purchase Price $226k - Rent Range $1,800mnth - Prop Tax $2,012yr



      19 Mckinley Place N, Saint Cloud, MN

      4bd, 3ba, 1,686 sqft - Listing/Purchase Price $169,900 - Rent Range $1,870 mnth - Prop Tax $3,100yr



      1007 6th Street N, Saint Cloud, MN
      4bd, 2ba, 1954sqft - Listing/Purchase Price $175k - Rent Range $1,910mnth - Prop Tax $1,874yr

      Need I go on ?...... 

      If a person is going to use tunnel-vision metrics of just looking at price sub $250k, rent's and prop tax and take 0 context otherwise..... 

      Dude, how many PER-DAY do you wanna buy? Serious. 1 a day, no problem. 2 a-day, I got you! 

      I can fire-hose these things...... 


      James, are these student rentals?

      0Reply
    • Steve Balinski
      OP
      Roselle, IL · Member since 2016 · 131 posts · 31 votes
      1y
      Quote from @James Hamling:

      @Steve Balinski as your presenting things with no context of details such as asset class, tenant class, cap-x, appreciation etc., I have answers ready that match: 

      1009 7th Avenue S, Saint Cloud, MN 56301

      5bd, 2ba, 1680 sqft, Listing/Purchase Price $159,900 - Rent Range $1,830 mnth - Prop tax $1,852yr. 



      1016 12th Avenue SE, Saint Cloud, MN
      4bd, 2ba, 1,466sqft, Listing/purchase Price $226k - Rent Range $1,800mnth - Prop Tax $2,012yr



      19 Mckinley Place N, Saint Cloud, MN

      4bd, 3ba, 1,686 sqft - Listing/Purchase Price $169,900 - Rent Range $1,870 mnth - Prop Tax $3,100yr



      1007 6th Street N, Saint Cloud, MN
      4bd, 2ba, 1954sqft - Listing/Purchase Price $175k - Rent Range $1,910mnth - Prop Tax $1,874yr

      Need I go on ?...... 

      If a person is going to use tunnel-vision metrics of just looking at price sub $250k, rent's and prop tax and take 0 context otherwise..... 

      Dude, how many PER-DAY do you wanna buy? Serious. 1 a day, no problem. 2 a-day, I got you! 

      I can fire-hose these things...... 


       Daaaaang, those numbers don't exist near me, not even close.  Curious how you found those, do you know that area or happen to stumble upon it?  Cheapest 3/2 near me even in a low class neighborhood is 250K in good shape, or 200K with work to do (nearly a wash after upgrades are done).  $1800/month rent around me in C class neighborhoods (and most of WI) is a 250K home. Can stretch to $2000-2200 if its a fresh remodel, but the #'s still don't work.

      Looking at B or C class properties, no section 8.  No Cap rate being SF.  Doesn't have to be an appreciating neighborhood as cashflow is my goal right now.  Purpose is to get out of my W2 job

      0Reply
    • James Hamling
      Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
      1y
      Quote from @Steve Balinski:
      Quote from @James Hamling:

      @Steve Balinski as your presenting things with no context of details such as asset class, tenant class, cap-x, appreciation etc., I have answers ready that match: 

      1009 7th Avenue S, Saint Cloud, MN 56301

      5bd, 2ba, 1680 sqft, Listing/Purchase Price $159,900 - Rent Range $1,830 mnth - Prop tax $1,852yr. 



      1016 12th Avenue SE, Saint Cloud, MN
      4bd, 2ba, 1,466sqft, Listing/purchase Price $226k - Rent Range $1,800mnth - Prop Tax $2,012yr



      19 Mckinley Place N, Saint Cloud, MN

      4bd, 3ba, 1,686 sqft - Listing/Purchase Price $169,900 - Rent Range $1,870 mnth - Prop Tax $3,100yr



      1007 6th Street N, Saint Cloud, MN
      4bd, 2ba, 1954sqft - Listing/Purchase Price $175k - Rent Range $1,910mnth - Prop Tax $1,874yr

      Need I go on ?...... 

      If a person is going to use tunnel-vision metrics of just looking at price sub $250k, rent's and prop tax and take 0 context otherwise..... 

      Dude, how many PER-DAY do you wanna buy? Serious. 1 a day, no problem. 2 a-day, I got you! 

      I can fire-hose these things...... 


       Daaaaang, those numbers don't exist near me, not even close.  Curious how you found those, do you know that area or happen to stumble upon it?  Cheapest 3/2 near me even in a low class neighborhood is 250K in good shape, or 200K with work to do (nearly a wash after upgrades are done).  $1800/month rent around me in C class neighborhoods (and most of WI) is a 250K home. Can stretch to $2000-2200 if its a fresh remodel, but the #'s still don't work.

      Looking at B or C class properties, no section 8.  No Cap rate being SF.  Doesn't have to be an appreciating neighborhood as cashflow is my goal right now.  Purpose is to get out of my W2 job

      Of course I know the area, it's been one of my markets for over a decade. 

      How do I know/find what I do.... Because I am a FT Investment Real Estate Professional, "in-it" since '09' and in Real Estate industry professionally since '93'. 

      It's like any profession really, a person who has dedicated decades of their life to mastering there craft will appear like a wizard to others of novice level experience. 

      When it comes to coding for a website I am somewhere between toddler and kindergarten level of mastery, lol. 

      Between my wife and I we know everything. I am the wizard of investing, real estate, business and BBQ..... She knows everything else, just ask her, lol.  

      0Reply
  • Charles ClarkBusiness Member
    Real Estate Broker · Milwaukee, WI · Member since 2020 · 306 posts · 209 votes
    1y

    @Steve Balinski
    You're not alone—many investors are feeling the squeeze in today’s rate environment. But your discipline and honesty in running the numbers already sets you apart. Here’s the thing: cash flow might be tight right now, but equity growth and smart financing can still make a deal worthwhile.

    Consider looking at creative strategies like seller financing, house hacking, or targeting properties with value-add potential (cosmetic or operational improvements). Even a slight rent boost or tax reassessment can shift your numbers.

    Also, don’t overlook out-of-state markets with better spreads—sometimes your capital works harder elsewhere. Keep grinding—this cycle will shift, and your prep now will pay off later. 👊

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  • Wale LawalBusiness Member
    Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes
    1y

    @Steve Balinski

    Totally hear you—today’s market has made it tough to hit traditional cash flow targets. In most solid markets, $500/month on a single-family is rare unless you're buying deeply discounted, using creative financing, or targeting mid-term rentals or niche tenants. You might consider shifting focus to out-of-state cash-flow markets where entry prices and expenses are lower, or exploring seller financing and subject-to deals to beat high rates. You’ve already built a great foundation—now it’s about adapting strategy, not giving up the game.

    Good luck!

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  • Paul Novak
    Rental Property Investor · WI · Member since 2023 · 192 posts · 144 votes
    1y

    Your numbers look eerily similar to mine.  I have made this work by putting more money into my deals.  I have the exact same cashflow goals as you.  I have rentals in Sheboygan, WI about an hour north of Milwaukee.  We purchased a property just this week it was $255K but the interest rate was 8.125% which was crazy.  I ended up putting down 30% and paying $907 in fees to get the rate down to 6.875%.  This property is a single family home 4 bedroom 2 bath property.  We are going to rent it out for $1,950.  Our property taxes are $2,400 and our insurance is $965.  We will be at that $500 mark for cash flow.  I have just been putting more down to hit my goal.

    1Reply
    • Steve Balinski
      OP
      Roselle, IL · Member since 2016 · 131 posts · 31 votes
      1y
      Quote from @Paul Novak:

      Your numbers look eerily similar to mine.  I have made this work by putting more money into my deals.  I have the exact same cashflow goals as you.  I have rentals in Sheboygan, WI about an hour north of Milwaukee.  We purchased a property just this week it was $255K but the interest rate was 8.125% which was crazy.  I ended up putting down 30% and paying $907 in fees to get the rate down to 6.875%.  This property is a single family home 4 bedroom 2 bath property.  We are going to rent it out for $1,950.  Our property taxes are $2,400 and our insurance is $965.  We will be at that $500 mark for cash flow.  I have just been putting more down to hit my goal.


       Even with your numbers I added $2,200 per year for maintenance all around I get basically 0 per month cash flow with a 10% management fee and 5% vacancy rate included

      0Reply
    • Marcus Auerbach
      Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
      1y
      Quote from @Steve Balinski:
      Quote from @Paul Novak:

      Your numbers look eerily similar to mine.  I have made this work by putting more money into my deals.  I have the exact same cashflow goals as you.  I have rentals in Sheboygan, WI about an hour north of Milwaukee.  We purchased a property just this week it was $255K but the interest rate was 8.125% which was crazy.  I ended up putting down 30% and paying $907 in fees to get the rate down to 6.875%.  This property is a single family home 4 bedroom 2 bath property.  We are going to rent it out for $1,950.  Our property taxes are $2,400 and our insurance is $965.  We will be at that $500 mark for cash flow.  I have just been putting more down to hit my goal.


       Even with your numbers I added $2,200 per year for maintenance all around I get basically 0 per month cash flow with a 10% management fee and 5% vacancy rate included


      Because cash flow is not really the primary game in RE. Cashflow pays for your expenses, PM etc and if the asset is seasoned, it starts throwing off a little cash flow, but usually not year one. Look at the responses you got from very seasoned investors.

      0Reply
    • James Hamling
      Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes
      1y
      Quote from @Marcus Auerbach:
      Quote from @Steve Balinski:
      Quote from @Paul Novak:

      Your numbers look eerily similar to mine.  I have made this work by putting more money into my deals.  I have the exact same cashflow goals as you.  I have rentals in Sheboygan, WI about an hour north of Milwaukee.  We purchased a property just this week it was $255K but the interest rate was 8.125% which was crazy.  I ended up putting down 30% and paying $907 in fees to get the rate down to 6.875%.  This property is a single family home 4 bedroom 2 bath property.  We are going to rent it out for $1,950.  Our property taxes are $2,400 and our insurance is $965.  We will be at that $500 mark for cash flow.  I have just been putting more down to hit my goal.


       Even with your numbers I added $2,200 per year for maintenance all around I get basically 0 per month cash flow with a 10% management fee and 5% vacancy rate included


      Because cash flow is not really the primary game in RE. Cashflow pays for your expenses, PM etc and if the asset is seasoned, it starts throwing off a little cash flow, but usually not year one. Look at the responses you got from very seasoned investors.


      It is called Real Estate INVESTING. 

      The simplest definition of INVESTING is: to acquire an asset or control of an asset who's value will increase/appreciate over time. 

      Seeking to purchase cash-flow is seeking to purchase cash-flow. It can be called DIVIDEND investing but it is NOT "investing" in any classical sense. 

      DIVIDEND investing most commonly comes with a significant factor called "NAV Erosion". 

      NAV - Net Asset Value. 

      Net Asset Value Erosion - The market value of the asset goes DOWN (is LESS) over time. 

      Yes, NAV Erosion is VERY real and most often too all but certainty happens when attempting to DIVIDEND invest in Real Estate with a significant dividend % from day1. 

      Why? Roofs wear out, furnaces wear out, appliances, flooring, paint, one and on and on. All these things have use spans. And the properties being sold with "teaser dividend %'s" comes with a sizable amount of those items soon out of use span or already past. 

      That why and how the acquisition price is what it is. 

      Because reality is the market set's the price for cash-flow/ROI. And market price today is NOT a 12 cap. It's more like a 4 or 5 cap.

      Look, if instead we say we are talking about corvettes.... 

      If everyone else is willing to buy corvettes for $100k, and everyone is selling corvettes for $100k, how realistic is it to say you want a great corvette for $50k ???? 

      What kind of corvette do you think you'll get for $50k ???? 

      EXACTLY. 

      0Reply
  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    1y

    @Steve Balinski your numbers look about right, but I think you should adjust your frame of reference a little. Milwaukee median sales prices have been going up 7-8% every year very consistently, we have doubled in the last 10 years. Currently 11%. 

    Cash flow is nice, but basically keeps the lights on until, but it does not move the needle compared to equity. If you want cash flow then buy or start a business. Real estate is just okay for cash flow, a business is literally set up for cash flow.

    Look at this guy for example, he is local: https://moxiepressurewashing.com/

    Almost no capital cost, little skills needed, no building needed, and only inexpensive equipment. Excellent marketing though! And he is raking it in!!

    1Reply
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