How is anyone making $ right now?
Rental Property Investor · Grant, FL · Member since 2015 · 18 posts · 15 votes
How is anyone making $ right now?
Most Popular Reply
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
2yObviously "real cash buyers" cash flow. People doing 1031's of paid off properties for replacements that are only 20-30% more expensive. People switching to MTR or STR are collecting 2-4x the rent. House hackers who are more concerned about saving rent or are doing rentals by room. LTR landlords are the most price sensitive and have to pay the least. They will only win by finding or making deals the others don't know about or taking a worse deal. Imagine if they accepted the same returns LTR landlords did. They'd be paying even higher prices.
Ps. I just did my first 1031 to buy my first new build. It equates to 60% down and a builder buy down of the rate plus closing help and it would still look like a bad investment to an outsider who didn’t know about the $100k in taxes I saved.
54 Replies
- Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes2y
Obviously "real cash buyers" cash flow. People doing 1031's of paid off properties for replacements that are only 20-30% more expensive. People switching to MTR or STR are collecting 2-4x the rent. House hackers who are more concerned about saving rent or are doing rentals by room. LTR landlords are the most price sensitive and have to pay the least. They will only win by finding or making deals the others don't know about or taking a worse deal. Imagine if they accepted the same returns LTR landlords did. They'd be paying even higher prices.
Ps. I just did my first 1031 to buy my first new build. It equates to 60% down and a builder buy down of the rate plus closing help and it would still look like a bad investment to an outsider who didn’t know about the $100k in taxes I saved.
- 2yJonathan PfluegerPro MemberBen Lomond, CA · Member since 2016 · 338 posts · 337 votes
I find all my deals off-market. I don’t go through wholesalers and very rarely do I go through an agent (though this does happen from time to time). I live in one of, if not the most, competitive market in the US and I still find deals.
I would recommend finding a niche and getting really good at that. For me, it was cold calling and relationship building. I took a long term approach and it paid off huge. In my market you can drop two deals a year and easily net half a million - so I focussed on quality and not quantity.
Cold calling is not for everyone but there are other methods. The point is, there are plenty of deals everywhere you just need to be in front of this deals (people) when they want to sell. Figure that out and you have got yourself a winning strategy.
- Rental Property Investor · Grant, FL · Member since 2015 · 18 posts · 15 votes2y
Quote from @Jonathan Pflueger:
I find all my deals off-market. I don’t go through wholesalers and very rarely do I go through an agent (though this does happen from time to time). I live in one of, if not the most, competitive market in the US and I still find deals.
I would recommend finding a niche and getting really good at that. For me, it was cold calling and relationship building. I took a long term approach and it paid off huge. In my market you can drop two deals a year and easily net half a million - so I focussed on quality and not quantity.
Cold calling is not for everyone but there are other methods. The point is, there are plenty of deals everywhere you just need to be in front of this deals (people) when they want to sell. Figure that out and you have got yourself a winning strategy.
2 Deals per year & net half a million? Using the BRRR Strategy? I could also flip homes & Make $...That's just not my goal as I'd like to own the property for the long term just don't want to have negative cash flow if I can help it.
- Wholesaler, Rehabber and Landlord · San Antonio, TX · Member since 2014 · 2k+ posts · 2k+ votes2y
Hey @Ell Jay Lindsey you kinda have 2 choices right now as things are in a little state of confusion. You can stay right where you are and do nothing real estate related. Which is ok because you have a regular job and a couple of properties.
OR you can change what you do. You know things are not penciling out right now. That is the way it is. I think what @Bill B. is saying is that if you want to keep going, you have to try different things. You may not WANT to do a flip or two, but it's kinda what you do already, you just dont sell. BUT if selling is what makes sense, do it. Maybe the numbers dont work for a regular rental, but maybe they do for a mid-term or short-term.
Keep the machine going. Stay in the game. Keep the contractors busy. When things make more sense to hold again, hold again. For now, do something else!!
- Investor · Arroyo Grande, CA · Member since 2014 · 1k+ posts · 1k+ votes2y
The only answers here are you need different markets or better deals.
That said, if you're executing a true, full BRRRR it's a bit unrealistic to expect to get much cash flow after the fact.
If I can get all my capital back (or real close) I'm content with operating at break even. It's essentially a free property and rents will go up over time, etc.
We're still doing plenty of strong cash flowing deals in Detroit but there's a balance. The more cash you end up leaving in it after a BRRRR the less net cash flow is left (generally speaking).
- 2yMichael SmytheBusiness MemberReal Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
@Ell Jay Lindsey going to guess that you are referring to Class A properties?
Prices & rates have gone up so much in the last 3-5 years, that these won't cashflow ANYWHERE!
So, you can either accept negative cashflow for 3-5 years or switch to investing in Class B & C properties.
Logical Property Management4.9453 Reviews - Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes2y
@Ell Jay Lindsey
We run a debt fund buying loans and others are doing private lending. That is one way you can make money in this environment
7e investments53 Reviews - 2yAlecia LovelessPro MemberMember since 2019 · 3k+ posts · 2k+ votes
@Ell Jay Lindsey I was finding deals.
Currently I’m raising funds for my next deal although I’m not sure what that deal will be yet. I’m sure it will appear once I have my funds in place and start looking for it.
I’m in the midst of renovating the last deal so am not too concerned about the next project just yet which is why I’m happy to be raising my capital currently.
I expect to get serious about looking for my next deal mid March.
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes2y
BRRRR is not a cash flow strategy.
District Invest Group546 Reviews - Rental Property Investor · Grant, FL · Member since 2015 · 18 posts · 15 votes2y
Quote from @Russell Brazil:
BRRRR is not a cash flow strategy.
Fair enough, what would be a cash flow strategy if not BRRRR? If I put 50% down on an investment it may cashflow but that's basically appreciation play because I'd have so much $ left in the deal & can only do that so many times before I run out of Cash.
- Rental Property Investor · Grant, FL · Member since 2015 · 18 posts · 15 votes2yI have seen some D properties 30-45min from my area that barely pencil out but the risk is actually getting tenant to pay so I don't dive into those but agree with what you're saying.
Quote from @Michael Smythe:
@Ell Jay Lindsey going to guess that you are referring to Class A properties?
Prices & rates have gone up so much in the last 3-5 years, that these won't cashflow ANYWHERE!
So, you can either accept negative cashflow for 3-5 years or switch to investing in Class B & C properties.
- Rental Property Investor · Grant, FL · Member since 2015 · 18 posts · 15 votes2y
Quote from @Travis Biziorek:
The only answers here are you need different markets or better deals.
That said, if you're executing a true, full BRRRR it's a bit unrealistic to expect to get much cash flow after the fact.
If I can get all my capital back (or real close) I'm content with operating at break even. It's essentially a free property and rents will go up over time, etc.
We're still doing plenty of strong cash flowing deals in Detroit but there's a balance. The more cash you end up leaving in it after a BRRRR the less net cash flow is left (generally speaking).
Makes sense.
- Rental Property Investor · Grant, FL · Member since 2015 · 18 posts · 15 votes2yTy Rick, I figured this is what most that rely on RE as a core income & have a team to care for are doing to keep the machine running. I have no problem with the long game.
Quote from @Rick Pozos:
Hey @Ell Jay Lindsey you kinda have 2 choices right now as things are in a little state of confusion. You can stay right where you are and do nothing real estate related. Which is ok because you have a regular job and a couple of properties.
OR you can change what you do. You know things are not penciling out right now. That is the way it is. I think what @Bill B. is saying is that if you want to keep going, you have to try different things. You may not WANT to do a flip or two, but it's kinda what you do already, you just dont sell. BUT if selling is what makes sense, do it. Maybe the numbers dont work for a regular rental, but maybe they do for a mid-term or short-term.
Keep the machine going. Stay in the game. Keep the contractors busy. When things make more sense to hold again, hold again. For now, do something else!!
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes2y
Quote from @Ell Jay Lindsey:
Quote from @Russell Brazil:
BRRRR is not a cash flow strategy.
Fair enough, what would be a cash flow strategy if not BRRRR? If I put 50% down on an investment it may cashflow but that's basically appreciation play because I'd have so much $ left in the deal & can only do that so many times before I run out of Cash.
Yield in any investment vehicle, whether real estate, dividends, bonds, is a reflection of the risk in the asset. The higher the risk, the higher the yield. So if you are looking for higher yields, then you have to look to take on higher risk. Simply look at a market or sub markets prevailing cap rates to easily judge the cash flow and the risk in that market.District Invest Group546 Reviews - Rental Property Investor · Grant, FL · Member since 2015 · 18 posts · 15 votes2yTy Russell, makes sense & I know “D” areas within 45 min drive that barely pencil out but at least they pencil out. The risk is on the tenant side. Appreciate the input.
Quote from @Russell Brazil:
Quote from @Ell Jay Lindsey:
Quote from @Russell Brazil:
BRRRR is not a cash flow strategy.
Fair enough, what would be a cash flow strategy if not BRRRR? If I put 50% down on an investment it may cashflow but that's basically appreciation play because I'd have so much $ left in the deal & can only do that so many times before I run out of Cash.
Yield in any investment vehicle, whether real estate, dividends, bonds, is a reflection of the risk in the asset. The higher the risk, the higher the yield. So if you are looking for higher yields, then you have to look to take on higher risk. Simply look at a market or sub markets prevailing cap rates to easily judge the cash flow and the risk in that market. - 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Travis Biziorek:
The only answers here are you need different markets or better deals.
That said, if you're executing a true, full BRRRR it's a bit unrealistic to expect to get much cash flow after the fact.
If I can get all my capital back (or real close) I'm content with operating at break even. It's essentially a free property and rents will go up over time, etc.
We're still doing plenty of strong cash flowing deals in Detroit but there's a balance. The more cash you end up leaving in it after a BRRRR the less net cash flow is left (generally speaking).
Or god Forbid you put some equity into the deals.. the idea that you can buy reahab and refi and not have any money in the deal works in very specific markets it simply does not work in most though so you dod the deal and maybe you get 70 or 80% of your cash back if you want to break even or cash flow positive.. if you want all your money back then U take negative cash flow until you refi and rents rise both might happen in a few years.. so temporary negative cash flow.
Virtually every investor on the west coast that is paying wholesalers or off MLS etc with all money returned on refi or minimum down will be negative cash flow for a few years.. but then appreciation kicks in and thats were real wealth is created not making 200 a month. - 2yV.G JasonPro MemberInvestor · Member since 2022 · 3k+ posts · 3k+ votes
You put more money down or buy distressed and fix up for less than stellar gains.You can get "creative", but not everyone has time to sniff out 1000 leads and act on 4 of them.
I think the fundamental mistake is thinking REI is instant cash flow.
Y'all got tricked by post-GR which was the greatest culmination of events for residential REI. The reality is physical assets are rarely intrinsic. You buy with the intention of it becoming intrinsic. That may sound speculative, but in some degree all forms of investing are. Most people are shackled by yester-years "investing" strategies.
A monkey could buy a property in 2014 and cash flow. This is a different ball game 10 years later.
- Rental Property Investor · Grant, FL · Member since 2015 · 18 posts · 15 votes2yI agree with this. My post was to see what all these people saying they are investing in LTR, BRRR’ing out, having positive cash flow & not leaving any $ in the deal are doing bc I haven’t seen that it’s possible 99% of the time. Some deals pencil out in non appreciating areas but that obviously comes with a risk. But if you are going to do what you said above then it’s not a real “business” that supports itself until time passes.
Quote from @Jay Hinrichs:
Quote from @Travis Biziorek:
The only answers here are you need different markets or better deals.
That said, if you're executing a true, full BRRRR it's a bit unrealistic to expect to get much cash flow after the fact.
If I can get all my capital back (or real close) I'm content with operating at break even. It's essentially a free property and rents will go up over time, etc.
We're still doing plenty of strong cash flowing deals in Detroit but there's a balance. The more cash you end up leaving in it after a BRRRR the less net cash flow is left (generally speaking).
Or god Forbid you put some equity into the deals.. the idea that you can buy reahab and refi and not have any money in the deal works in very specific markets it simply does not work in most though so you dod the deal and maybe you get 70 or 80% of your cash back if you want to break even or cash flow positive.. if you want all your money back then U take negative cash flow until you refi and rents rise both might happen in a few years.. so temporary negative cash flow.
Virtually every investor on the west coast that is paying wholesalers or off MLS etc with all money returned on refi or minimum down will be negative cash flow for a few years.. but then appreciation kicks in and thats were real wealth is created not making 200 a month. - Rental Property Investor · Grant, FL · Member since 2015 · 18 posts · 15 votes2yAgreed, just wanted to make sure there wasn’t something I’ve been missing. I’m in RE for the long term but don’t know how all these “gurus” are making a business of it right now without those properties purchased when rates were 3%
Quote from @V.G Jason:
You put more money down or buy distressed and fix up for less than stellar gains.You can get "creative", but not everyone has time to sniff out 1000 leads and act on 4 of them.
I think the fundamental mistake is thinking REI is instant cash flow.
Y'all got tricked by post-GR which was the greatest culmination of events for residential REI. The reality is physical assets are rarely intrinsic. You buy with the intention of it becoming intrinsic. That may sound speculative, but in some degree all forms of investing are. Most people are shackled by yester-years "investing" strategies.
A monkey could buy a property in 2014 and cash flow. This is a different ball game 10 years later.
- 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Ell Jay Lindsey:
I agree with this. My post was to see what all these people saying they are investing in LTR, BRRR’ing out, having positive cash flow & not leaving any $ in the deal are doing bc I haven’t seen that it’s possible 99% of the time. Some deals pencil out in non appreciating areas but that obviously comes with a risk. But if you are going to do what you said above then it’s not a real “business” that supports itself until time passes.Quote from @Jay Hinrichs:
Quote from @Travis Biziorek:
The only answers here are you need different markets or better deals.
That said, if you're executing a true, full BRRRR it's a bit unrealistic to expect to get much cash flow after the fact.
If I can get all my capital back (or real close) I'm content with operating at break even. It's essentially a free property and rents will go up over time, etc.
We're still doing plenty of strong cash flowing deals in Detroit but there's a balance. The more cash you end up leaving in it after a BRRRR the less net cash flow is left (generally speaking).
Or god Forbid you put some equity into the deals.. the idea that you can buy reahab and refi and not have any money in the deal works in very specific markets it simply does not work in most though so you dod the deal and maybe you get 70 or 80% of your cash back if you want to break even or cash flow positive.. if you want all your money back then U take negative cash flow until you refi and rents rise both might happen in a few years.. so temporary negative cash flow.
Virtually every investor on the west coast that is paying wholesalers or off MLS etc with all money returned on refi or minimum down will be negative cash flow for a few years.. but then appreciation kicks in and thats were real wealth is created not making 200 a month.
totally disagree with this statement.
"
But if you are going to do what you said above then it’s not a real “business” that supports itself until time passes. "
its a real business might not support it self day one with zero equity in it.. but its real and those that buy those assets are the ones that get wealthy .. far more than those that buy assets that do not appreciate or if they do very little but collect a few bucks a month which you know what happens to that it gets pissed away . - Rental Property Investor · Grant, FL · Member since 2015 · 18 posts · 15 votes2yI should have clarified what I mean by “real business”…RE isn’t a business that supports itself immediately like a service based business. It’s a long term investment. I’m just wondering how people seem to be supporting themselves by RE Alone in this environment.
Quote from @Jay Hinrichs:
Quote from @Ell Jay Lindsey:
I agree with this. My post was to see what all these people saying they are investing in LTR, BRRR’ing out, having positive cash flow & not leaving any $ in the deal are doing bc I haven’t seen that it’s possible 99% of the time. Some deals pencil out in non appreciating areas but that obviously comes with a risk. But if you are going to do what you said above then it’s not a real “business” that supports itself until time passes.Quote from @Jay Hinrichs:
Quote from @Travis Biziorek:
The only answers here are you need different markets or better deals.
That said, if you're executing a true, full BRRRR it's a bit unrealistic to expect to get much cash flow after the fact.
If I can get all my capital back (or real close) I'm content with operating at break even. It's essentially a free property and rents will go up over time, etc.
We're still doing plenty of strong cash flowing deals in Detroit but there's a balance. The more cash you end up leaving in it after a BRRRR the less net cash flow is left (generally speaking).
Or god Forbid you put some equity into the deals.. the idea that you can buy reahab and refi and not have any money in the deal works in very specific markets it simply does not work in most though so you dod the deal and maybe you get 70 or 80% of your cash back if you want to break even or cash flow positive.. if you want all your money back then U take negative cash flow until you refi and rents rise both might happen in a few years.. so temporary negative cash flow.
Virtually every investor on the west coast that is paying wholesalers or off MLS etc with all money returned on refi or minimum down will be negative cash flow for a few years.. but then appreciation kicks in and thats were real wealth is created not making 200 a month.
totally disagree with this statement.
"
But if you are going to do what you said above then it’s not a real “business” that supports itself until time passes. "
its a real business might not support it self day one with zero equity in it.. but its real and those that buy those assets are the ones that get wealthy .. far more than those that buy assets that do not appreciate or if they do very little but collect a few bucks a month which you know what happens to that it gets pissed away . - 2yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Ell Jay Lindsey:
I should have clarified what I mean by “real business”…RE isn’t a business that supports itself immediately like a service based business. It’s a long term investment. I’m just wondering how people seem to be supporting themselves by RE Alone in this environment.Quote from @Jay Hinrichs:
Quote from @Ell Jay Lindsey:
I agree with this. My post was to see what all these people saying they are investing in LTR, BRRR’ing out, having positive cash flow & not leaving any $ in the deal are doing bc I haven’t seen that it’s possible 99% of the time. Some deals pencil out in non appreciating areas but that obviously comes with a risk. But if you are going to do what you said above then it’s not a real “business” that supports itself until time passes.Quote from @Jay Hinrichs:
Quote from @Travis Biziorek:
The only answers here are you need different markets or better deals.
That said, if you're executing a true, full BRRRR it's a bit unrealistic to expect to get much cash flow after the fact.
If I can get all my capital back (or real close) I'm content with operating at break even. It's essentially a free property and rents will go up over time, etc.
We're still doing plenty of strong cash flowing deals in Detroit but there's a balance. The more cash you end up leaving in it after a BRRRR the less net cash flow is left (generally speaking).
Or god Forbid you put some equity into the deals.. the idea that you can buy reahab and refi and not have any money in the deal works in very specific markets it simply does not work in most though so you dod the deal and maybe you get 70 or 80% of your cash back if you want to break even or cash flow positive.. if you want all your money back then U take negative cash flow until you refi and rents rise both might happen in a few years.. so temporary negative cash flow.
Virtually every investor on the west coast that is paying wholesalers or off MLS etc with all money returned on refi or minimum down will be negative cash flow for a few years.. but then appreciation kicks in and thats were real wealth is created not making 200 a month.
totally disagree with this statement.
"
But if you are going to do what you said above then it’s not a real “business” that supports itself until time passes. "
its a real business might not support it self day one with zero equity in it.. but its real and those that buy those assets are the ones that get wealthy .. far more than those that buy assets that do not appreciate or if they do very little but collect a few bucks a month which you know what happens to that it gets pissed away .
they dont is the answer not at that level.. if you have max leverage you need LOTS of doors LOTS of debt.. most that do this have other income or those in the business have transactional income like flipping homes then keeping a few a year .. your in the business but you cant live on rental income alone unless you start with a ton of equity up front or build up a large number of doors and all the assocciated debt that goes with that. - 2yJohn UnderwoodPro MemberInvestor · Greer, SC · Member since 2014 · 13k+ posts · 17k+ votes
@Jonathan Pflueger
We are also finding market deals.
Wholesalers had gotten spoiled by adding 30k to their "deals", well the winds have shifted.
- Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes2y
After a unicorn decade, we are back to normal. If you want to "invest", you'll need some money. Something for nothing is simply not happening anymore (on a regular basis). I have been BRRRR'ing for over a decade in Milwaukee and about 3 years ago (when inventory started getting unltra low) our BRRRR's would come up with some negative equity. The alternative is to cut corners and for example leave the roof for another 3 years, but that's not how we operate.
You can also zoom out: if you factor in 3 years worth of appreciation, BRRRR's are working very well. We didn't have that before. - Investor · Naples, FL · Member since 2016 · 256 posts · 75 votes2y
@Ell Jay Lindsey
My W2 job, buy I buy and hold
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