What is your expected Cash Flow?

[Corey Knight]

Just getting started in purchasing rental properties and wanted to get an idea on what you expect for a minimum on a yearly/monthly cash flow return. For single or multi family. No more than 4 plex. Thanks 

[JD Martin]

I have SFHs. If I cannot net more than 10% on my cash invested (outside of tax considerations) and have >50% monthly cash flow after all expenses including the note I won't do the deal. Example: SFH I purchase for $40k cash outright, I expect to net >$4k annually on rent and all expenses should be <50% of the monthly rent (i.e. rent = 600, expenses < 300).

I know there are all kinds of rules on here - 1%, 2%, 50%, whatever - but that is what I use and it works for me. Everything I have nets >15% on my cash invested and expenses are <40% of monthly rent. This allows me to have a built-in vacancy protection rate of 60-70%, meaning that rent from one unit can cover all expenses on vacancies that high, which is catastrophic, armeggedon-type vacancy figures for my area!