Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
7mo
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.
Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
7mo
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.
Hinton, WV · Member since 2026 · 1k+ posts · 373 votes
7mo
One thing that saved me: set up separate accounts for each property's reserves and future acquisitions. I keep 6 months expenses per unit in reserves, then everything else flows to the acquisition fund. Makes it way easier to see what you can actually spend on the next deal without touching emergency money. How do you separate your cash buckets right now?