How can I have cash flow while paying taxes & insurance?

[Dominique Mickles]

I’m really trying to get into the game but I was wondering if I have to pay mortgage, taxes & insurance each month isn’t that getting into my cash flow? How would I really be profiting?

[Josiah Kay]

That's where finding that sought after "deal" comes into play. Assuming that you are interested in buy and hold, you will also need to include repairs, capital expenditures (CAPEX), vacancy, water/sewer (unless tenant is responsible), and property management. Once you factor in all those expenses, it becomes more tricky to find a property that is going to cashflow well and make you a good return. Every house out there has price that will make it a good investment, it is just a matter if finding an owner that is interested in selling it to you at that price.

[Dominique Mickles]

@Josiah Kay so is taxes and insurance paid monthly or yearly & I’m lookin to do seller financing.

[Josiah Kay]

Typically, hazard insurance is billed annually. Depending on your area, tax payments could vary. For example, in WI they are typically due annually, however, in FL I've seen taxes due in two separate installments. Also, you may be able to setup a payment plan with the county to pay in installments. 

I know you said you are looking to do seller financing, however, with conventional financing your lender may escrow for taxes and/or insurance in which case you would pay your lender a portion of the taxes and/or insurance on a monthly basis. Then, when an insurance or tax payment is due, your lender would either cut a check directly to the payee or send you a check to pay the bill. 

[Wayne Brooks]

It doesn’t matter if they are monthly or yearly, the monthly cost is still the same.

[Dominique Mickles]

@Wayne Brooks Just tryin to understand how I would profit if all of those things cut into my cash flow not to mention money to put to the side for repairs when needed.

[Basit Siddiqi]

@Dominique Mickles

You should be able to find some cash flowing properties in chicago or at least within a 2 hour driving radius of the city.

There are deals out there that are profitable - you just need the experience analyzing deals. 

Just to recap - for you to be profitable you need to calculate rent minus expenses like repairs, mortgage interest, home owners insurance, real estate taxes, capital expenditures, allowance for vacancy, utilities(if not paid by tenant), travel to and from the property, etc. You can also factor in the cost of the principal payments in your cash-flow analysis.

[Katie Fiola Jones]

@Dominique Mickles

This video really helped me to understand how to evaluate properties to see if they will cashflow. 

https://www.youtube.com/watch?v=T_7vhsSBi7c&t=1240...