Updated over 4 years ago on . Most recent reply
The Negative Cash Flow Club!!
The numbers are in for 2021...
6 doors acquired in 2021... 8 total doors owned (all SFR)
54k in rents, 24k expenses, 30k cap ex, and 30,500k in PITI...
For a grand total of -31k net cash flow!!!
but...
400k equity growth! I'd call that a win.
Know what you're getting into folks!! It's a long term game for buy & holders.
Cheers!!
Most Popular Reply
Nothing wrong with cash flow negative, as long as you understand what you're getting into and have the reserves to cover the loss.
That said, a lot of people go into negative cash flow without understanding the risks. I know a lot of investors who were using this method to scale back in 2004-2007, and they learned the hard way that markets don't always go up. Many of them were over-leveraged, under-capitalized, and weren't prepared for a spike in vacancies and bad debt.
It all boils down to your ability to absorb risk, and only you know what that looks like.