Updated 2 months ago on . Most recent reply
Managing Cash Flow While Planning for Portfolio Growth
Many landlords balance current cash flow with flexibility for future acquisitions.
How are you structuring rentals today to keep options open for tomorrow?
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#5 All Forums Contributor
- Plymouth, MI
I hold the property long enough for two things to happen. The order doesn't matter:
1) When accumulated CF is =/+ than the cash I put in (the DP). This means I have recovered all my cost, and all CF and profits are pure profit to me. I have a free property since the tenant is buying it for me.
2) When the appreciation is equal to the initial DP (the equity I paid for). This means when I flip it (now), I will walk away with twice what I started with, and it's all profit since the CF (see item #1) has recovered all my cost.
This is the point where I will have my maximum profit. Holding this property longer will decrease that profit (as in losing money) by the day.