The Myth of Cash Flow

[Collin Hays]

I got a chance to read this over lunch today, and it really hit home some excellent points about investing in real estate.  Thought I would pass it along.

The Myth of Cash Flow

[Michael Baum]

Quote from @Collin Hays:

Quote from @Michael Baum:

I read it, but I did have some disagreements. I don't like anything that loses money every month expecting/hoping that I will make it up with appreciation.

I don't know that it is "losing money".  A 401K isn't producing any monthly cashflow, yet we dutifully dump $1,000 a month in it for 30 years, hoping there is a pot at the end of the rainbow.  Never think twice about it.

If we are making some or all of a mortgage payment for a few years on a vacation rental, it's only the interest that is lost - the rest is paying off the asset, all while the asset continues to go up in value through the years.

I hear ya man, but I want something that is flowing positive in addition to any appreciation. Right now there are areas of the country that are slowly depreciating at a 2.5% rate. You just never know!