How much should you typically aim to Cashflow per property? Why?

Most Popular Reply

Jacob Sampson
Investor · Topeka, KS · Member since 2015 · 1k+ posts · 1k+ votes
6y

I think there are always other variables that come into play when discussing cash flow.  For example, I look for at least $100/door but on a 15 year note and in a C+ or better neighborhood.

Further, everyone calculates cash flow differently. I calculate cash flow as gross rent - 30%(vacancy, maint, and capex) - PITI = true long term cash flow.

As an example $1000 (rent) - $300 (vac, maint, and capex) - $600 (principal, interest, taxes, and insurance) = true long term cash flow.  And remember the principal and interest is based on a 15 year note.

25Reply
See this reply in the discussion

105 Replies

Jump to latestLatest
  • Jerryll Noorden
    Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes
    6y

    100 / door?? 200 / door?

    ARE YOU KIDDING?!

    Dudes you guys need to stop buying too much into the podcasts here.

    I get over 2000/month from a stupid referral program when people buy some products from my referral links.

    So are you saying that It is like owning 20 houses/doors?

    100/month does not offset all the risks and headaches that comes with home ownership.

    OMG man!

    No, I do like $1300/ door! Otherwise it is simply not worth it!

    Wait think about it. So if you would like to retire with a measly 10K/month passive income, you need to OWN ONE HUNDRED DOORS???

    You all MUST be crazy!

    7Reply
  • Andrew George Dennis
    Rental Property Investor · Boulder, CO · Member since 2018 · 52 posts · 9 votes
    6y
    Originally posted by @Jerryll Noorden:

    100 / door?? 200 / door?

    ARE YOU KIDDING?!

    Dudes you guys need to stop buying too much into the podcasts here.

    I get over 2000/month from a stupid referral program when people buy some products from my referral links.

    So are you saying that It is like owning 20 houses/doors?

    100/month does not offset all the risks and headaches that comes with home ownership.

    OMG man!

    No, I do like $1300/ door! Otherwise it is simply not worth it!

    Wait think about it. So if you would like to retire with a measly 10K/month passive income, you need to OWN ONE HUNDRED DOORS???

    You all MUST be crazy!

     What are the numbers like on a $1300 cash flow property

    1Reply
  • Andrew McKinnon
    Houston, TX · Member since 2017 · 38 posts · 19 votes
    6y

    @Stephen J Davis Im looking into buying my next sfh around that same area. Would love see how you’re rehab budget goes walking through a property as I’m trying to set mine up (just minor repairs) before renting out to med/law students.

    0Reply
  • Jerryll Noorden
    Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes
    6y
    Originally posted by @Andrew George Dennis:
    Originally posted by @Jerryll Noorden:

    100 / door?? 200 / door?

    ARE YOU KIDDING?!

    Dudes you guys need to stop buying too much into the podcasts here.

    I get over 2000/month from a stupid referral program when people buy some products from my referral links.

    So are you saying that It is like owning 20 houses/doors?

    100/month does not offset all the risks and headaches that comes with home ownership.

    OMG man!

    No, I do like $1300/ door! Otherwise it is simply not worth it!

    Wait think about it. So if you would like to retire with a measly 10K/month passive income, you need to OWN ONE HUNDRED DOORS???

    You all MUST be crazy!

     What are the numbers like on a $1300 cash flow property

     I own a house in Florida. My mortgage is  1800, and I charge 3200/month for that sucker.

    I have no idea what the numbers really look like. I do know that I put at least 1200 in my pocket. I let someone else handle all that. That is why I don't really know about the numbers. It was never meant to be a rental property. I bought that house for me,  but then I was kicked out of the country because of VISA issues (NASA losing funding). So I went to Italy. I rented out the house and  it just made me money...

    All I know is that 100 dollars really is low man. Maybe that is the standard, and I am not saying it is wrong (.. well maybe I AM saying that)... but the point here is, that for ME... that is just not worth all the headache and risk, buying a house.

    Again that is just me.

    So just think about it.

    If I were to buy a 100 unit apartment complext.. how much does that cost?



    With mid-range materials, a normal foundation with full basement, efficient doors and windows, all appliances, and "turnkey" finishing would run at an average of $64,575 to $86,100 per unit to complete. This does not include acquisition of the land, however.

    ..

    so lets make it a round number $90K per unit.  SO 100 units... $90,000.00 x 100 = 9M

    So with 100/door, you will be making  10K/month,  which is 120000/ year.

    To pay that off you need 75 years to pay it off on that salary.

    Obviously this is a way to plain calculation.

    You are not even including interest, cost of money  insurance, things that go "oops"... 

    Naahhh...

    I am SURE I did the numbers totally wrong...  but I still think that is just not worth my time.

    1Reply
  • Tyler GibsonBusiness Member
    Real Estate Agent · Orlando, FL · Member since 2017 · 1k+ posts · 2k+ votes
    6y

    @Carlos Castañon I see you said "good property" and that makes me wonder what you mean by that. If you mean a property in a good neighborhood B class and up that doesn't require a bunch of work then yeah you likely aren't going to make 200-300 a door unless you put down a large down payment to buy your cash flow. Any more in Orlando you have to be an hour outside of downtown to make the numbers work really well. There are some areas where you can do well with section 8 but you won't see the same appreciation. 

    [email protected]407-590-9858
    GPG Team 596 Reviews
    WebsiteView Page
    2Reply
  • Josh Ray
    Rental Property Investor · Highland, UT · Member since 2020 · 6 posts · 10 votes
    6y

    @Dontrea Riser

    I’m brand new here, so maybe I’m missing something, but it sure doesn’t seem worth the effort and risk to pickup properties that are cash flowing under a certain amount. That amount will be different for everyone, and some may not care about it at all.

    But, I’ve seen a few suggesting they’re happy with < $50/mo because the % is right. That’s less than $600 a year, I don’t know if that’s worth it. How do you justify that after considering all of your time and effort that will go into it?

    1Reply
  • Josh Ray
    Rental Property Investor · Highland, UT · Member since 2020 · 6 posts · 10 votes
    6y

    @Jerryll Noorden

    I agree that $100/mo seems low, but I think you’re misunderstanding the math. That’s the profit, after paying the mortgage and all other expenses.

    In your scenario, you calculated 100 doors at $100/mo to be $120,000 - which would take 75 years to payoff the $9M. That $120k a year, if it were cash flow, would be your profit, not your total revenue. That means those units rented for more - let’s say $800/mo. You have to then subtract the loan payment, taxes, insurance, maintenance, property manager, landscaping, marketing......what you’re left with is the cash flow or $100/mo per door in this case.

    2Reply
  • Robert Damato
    Rental Property Investor · Milwaukee, WI · Member since 2019 · 42 posts · 14 votes
    6y

    My personal minimum cashflow is 500 a door, so 1000 per duplex. 

    2Reply
  • Jerryll Noorden
    Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes
    6y
    Originally posted by @Josh Ray:

    @Jerryll Noorden

    I agree that $100/mo seems low, but I think you’re misunderstanding the math. That’s the profit, after paying the mortgage and all other expenses.

    In your scenario, you calculated 100 doors at $100/mo to be $120,000 - which would take 75 years to payoff the $9M. That $120k a year, if it were cash flow, would be your profit, not your total revenue. That means those units rented for more - let’s say $800/mo. You have to then subtract the loan payment, taxes, insurance, maintenance, property manager, landscaping, marketing......what you’re left with is the cash flow or $100/mo per door in this case.

     No no, I totally understood it correctly

    Like I said the numbers may be wrong.. but 100 AFTER all else is paid, IS still way too low.

    0Reply
  • Annie Johnson
    Realtor · Seward, AK · Member since 2017 · 136 posts · 79 votes
    6y

    Right now we won’t make an offer on anything that doesn’t take home $200/door. That way we know we have a little wiggle room and if something comes up we won’t go negative. I remind myself these two things-

    1. To get 1 good deal accepted you may need to put in dozens of offers that are denied

    2. Run your numbers with the lowest rent and highest rehab prediction

    Hope this is helpful!

    1Reply
  • Michael Mulroy
    Rental Property Investor · Cleveland, OH · Member since 2016 · 24 posts · 18 votes
    6y

    @Dontrea Riser the question you need to ask is how much return on your cash investment do you want to make? After all your expenses, your net cash flow divided by the cash invested in down payment and rehab, etc. is a measure of your investment performance. If you're cash on cash return is low say, 5-10%, why bother with the headaches of owning the property and go for a stock investment. If your CoCR is high, like 20% or higher, then you know it's worth it and proceed with the property.

    1Reply
  • Jennifer Rysdam
    Rental Property Investor · Cleveland, MN · Member since 2017 · 518 posts · 354 votes
    6y
    Originally posted by @Joe P.:

     I think Brandon Turner coined and pushed the $100 CF per door/per month figure, and a lot of folks use it. I think it's a good number to use.


    I thought Brandon did $200 per door.

    0Reply
  • Matt BurrPro Member
    Real Estate Investor · Chelsea, MI · Member since 2017 · 56 posts · 13 votes
    6y

    There are a few things that seem to need to be clarified in this conversation.

    1) there is a big difference between multi family and sfh

    2) Financing also makes a huge difference. You can make any property make tons per door just put down more cash

    3) also propertise you pay more for generally will make more per door but your over all cash on cash return can be much lower

    1Reply
  • Fred Cannon
    Rental Property Investor · St Augustine, FL · Member since 2019 · 265 posts · 279 votes
    6y

    @Matt Burr just curious how much value do you put on time. Time and effort is a valuable asset that we give up to manage our properties. I look for a 10% return plus @ $300 a month cash at the end of the month to make it worth time and effort. My sweet spot is around $150-$175k property with 30% down. I try to do turnkey. There is a nice market in this range

    And good tenants willing to pay up to $1500 a month if the location is good. Appreciation is just icing on the cake. I do count mortgage pay down as part of my $300 a month because that is just like putting money into savings. That’s my formula.

    0Reply
  • Fred Cannon
    Rental Property Investor · St Augustine, FL · Member since 2019 · 265 posts · 279 votes
    6y

    @Steve Orluski I like a 30 year mortgage less that 5%. I am currently looking to close at 4.5% on a 143k property with 30% down and rents for $1250 a month my cash flow should be around $350 to $400 a month plus mortgage pay down on a $43k plus closing down payment. Not great but something I would do over and over This is a turnkey property

    0Reply
  • Matt BurrPro Member
    Real Estate Investor · Chelsea, MI · Member since 2017 · 56 posts · 13 votes
    6y

    @Fred Cannon

    One example is a triplex that is $75k. Cash flow on the property after all expenses is $293. With 20% down that is above 18% Cash on cash return. I also own three other propertise a block away.

    0Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    6y
    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
    Reafco512 Reviews
    WebsiteView Page
    0Reply
  • Joe P.
    Philadelphia, PA · Member since 2017 · 824 posts · 1k+ votes
    6y
    Originally posted by @Jennifer Rysdam:
    Originally posted by @Joe P.:

     I think Brandon Turner coined and pushed the $100 CF per door/per month figure, and a lot of folks use it. I think it's a good number to use.


    I thought Brandon did $200 per door.

    I was on one of his video podcast things, and I recall him saying his minimum is $100 per door.

    I also thought I saw it in his book -- which I have lent to a friend and I am getting back this week -- so I can't be sure.

    0Reply
  • Dan Nim
    Member since 2019 · 13 posts · 2 votes
    6y

    Everyone talks about $100 or $200/door but what does that represent as far as return on your money invested? Its all relative.

    If you put $50,000 down for the home and collect $100/month net after vacancy/expenses/PM and etc, that's $1,200/year. Divide that $50,000 and that only amounts to a measly 2.4% return on your money. Put down less and receive a higher yield, than ya that's better.

    I know it is not that simple because you can factor in principle pay down and potential appreciation in for return but strictly from a cash-on-cash return that's not a whole heck of a lot of a return for something that is not as liquid or that much better than the current (2/4/2020) risk-free rate on a 3 month US treasury bond yielding 1.57%. 

    Shouldn't we be looking at other calculation like Return on Equity (ROE), Internal Rate of Return (IRR) etc?

    1Reply
  • Greg M.
    Rental Property Investor · Los Angeles, CA · Member since 2017 · 2k+ posts · 5k+ votes
    6y

    Way too many people on these forums focus on cash flow. All sorts of silly rules of thumb. I won't touch it unless it makes $100 or $200 or 1% or 2% or 3X^4/(1 - cos Y)3^-1 where X is the number of square feet and Y is the number of emotional support animals...

    Cash flow is a meaningless number. It's too dependent on how much you put down. What's better, cash flow of $100 and you put $50K down or cash flow of $50 and you put $10K down?

    What is your personal objective with owning property? Are you looking for small cash flow now, wealth building, or higher future cash flow?

    Many people on these forums own property as their job. They need free cash flow as it funds their paycheck. At the end of the month, they need to have free cash flow so they can pay their bills and put food on the table. And this is a fine approach if that is what you want. Other people own property as a long term investment. This is the approach I personally take. I put up the initial investment (down payment) and the renters pay the bank back on the loan, all the while building equity for me. I may or may not have any free cash flow now, but at some point in the future the renters will have paid the loan off and I will now have an asset with a ton of free cash flow to keep me happy in retirement.

    I'm perfectly happy having $0 or even negative free cash flow right now, as long as overall the investment performs well. 

    2Reply
  • Dan Nim
    Member since 2019 · 13 posts · 2 votes
    6y

    @Fred Cannon where r u investing in those 150-170k turnkey properties?

    0Reply
  • Mark S.Pro Member
    Rental Property Investor · KY · Member since 2013 · 1k+ posts · 540 votes
    6y
    Originally posted by @Jerryll Noorden:
    Originally posted by @Andrew George Dennis:
    Originally posted by @Jerryll Noorden:

    100 / door?? 200 / door?

    ARE YOU KIDDING?!

    Dudes you guys need to stop buying too much into the podcasts here.

    I get over 2000/month from a stupid referral program when people buy some products from my referral links.

    So are you saying that It is like owning 20 houses/doors?

    100/month does not offset all the risks and headaches that comes with home ownership.

    OMG man!

    No, I do like $1300/ door! Otherwise it is simply not worth it!

    Wait think about it. So if you would like to retire with a measly 10K/month passive income, you need to OWN ONE HUNDRED DOORS???

    You all MUST be crazy!

     What are the numbers like on a $1300 cash flow property

     I own a house in Florida. My mortgage is  1800, and I charge 3200/month for that sucker.

    I have no idea what the numbers really look like. I do know that I put at least 1200 in my pocket. I let someone else handle all that. That is why I don't really know about the numbers. It was never meant to be a rental property. I bought that house for me,  but then I was kicked out of the country because of VISA issues (NASA losing funding). So I went to Italy. I rented out the house and  it just made me money...

    All I know is that 100 dollars really is low man. Maybe that is the standard, and I am not saying it is wrong (.. well maybe I AM saying that)... but the point here is, that for ME... that is just not worth all the headache and risk, buying a house.

    Again that is just me.

    So just think about it.

    If I were to buy a 100 unit apartment complext.. how much does that cost?



    With mid-range materials, a normal foundation with full basement, efficient doors and windows, all appliances, and "turnkey" finishing would run at an average of $64,575 to $86,100 per unit to complete. This does not include acquisition of the land, however.

    ..

    so lets make it a round number $90K per unit.  SO 100 units... $90,000.00 x 100 = 9M

    So with 100/door, you will be making  10K/month,  which is 120000/ year.

    To pay that off you need 75 years to pay it off on that salary.

    Obviously this is a way to plain calculation.

    You are not even including interest, cost of money  insurance, things that go "oops"... 

    Naahhh...

    I am SURE I did the numbers totally wrong...  but I still think that is just not worth my time.

    $3,200 rent:

    10% PM: $320

    8% vacancy, 5% maintenance, 5% capex: $576

    PITI: $1,800

    Rent - PM - Reserves - PITI: $504

    1Reply
  • Joshua Levine
    Stamford, CT · Member since 2017 · 17 posts · 9 votes
    6y
    Originally posted by @Juan Erick Rico Avalos:

    I would say it's all about how much skin you got in the deal. If I invest 100k it wouldn't make sense to only make $100 in monthly cash flow. Let's say I only invest 10k and get $ 100 a month that's way better because i'm getting a 10% cash on cash return on my money.

    $100/ month is $1200 / year. 

    Therefore, wouldn't it be 12% CoC?

    0Reply
  • Timothy Hero
    Lender · United States · Member since 2020 · 1k+ posts · 499 votes
    6y

    If I can't net at least 20% COC, I'm not interested. If there's not at least $500 per door, I don't think it's worth the time or investment. Of course this means you're buying properties in the $280k+ range.

    In other words, MFH priced $300k or more.

    0Reply
  • Zachary Bellinghausen
    Member since 2017 · 143 posts · 76 votes
    6y

    @Dontrea Riser

    Depends on type of asset and price point.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free