Savannah First Rental Property - Numbers Aren't Working, What Am I Missing?

Question

I am looking to make my first real estate investment purchase in Savannah, GA in the next 6 months. I've been looking at small multi-families and SFRs between 270-500k. My original strategy was to use my VA loan to house hack a small multi-family, but I have since broadened my financing options to conventional rental property investment and conventional second home financing.

I have been doing my homework for a few months now, I read Brandon Turner's "The Book on Rental Property Investing," I listen to the BP podcasts, built a relationship with an investor friendly real estate agent and lender in the local area, and built my own rental property cash flow analysis spreadsheet that includes everything from P&I, taxes, insurance, maintenance, vacancy, PM, lawn care, legal, and miscellaneous on the expense side, and rent to price, rent to payment, CoCROI, gross rent / $1000, cash flow, break even price, etc on the analysis side.

Only problem is the numbers aren't working.

From what I can tell, it seems like the P&I is eating up all of the rental income even before expenses. I considered short-term / executive rentals to drive up income, but the added PM and utility costs seem to negate any of the benefit. Because of current interest rates, my general inexperience pushing me toward newer properties with little to no fix up required, PM, and Savannah's appreciation potential, I acknowledge and accept that the cash flow potential may be minimal. I am also willing to put down a moderately sized down payment if that's what it takes to make the numbers work (within reason, I don't want to expend all my capital into my first property). But I don't want to purchase a liability that ends up costing me money every month when its fully rented out. Where is the line?

My overarching goals for my first property are to minimize risk, maximize longevity, build my team, learn the market, and get into the game.

Is there something that I'm missing or am I thinking about this the wrong way? Am I looking in the wrong market, is now just a bad time to buy?

Michael Eskenasy · Answer

I actually think your spreadsheet is working.

It’s telling you something you may not want it to tell you: the deals you’re looking at don’t work at today’s price, rent and cost of capital.

One thing I would not do is keep increasing the down payment until the cash flow turns positive. That can make the monthly number prettier while hiding the actual problem. You’re essentially prepaying years of negative cash flow by trapping more of your capital in the property.

I’d calculate the return on every additional dollar of down payment. If putting another $50K down only improves cash flow by a couple hundred bucks a month, ask what return that $50K is actually earning you.

The VA house hack is a different animal because part of the return is housing expense you no longer have to pay elsewhere. A property that looks mediocre as a pure rental can make complete sense when one unit is replacing your own rent or mortgage expense.

But if you switch to a conventional investment property, I’d make the property earn its way onto the spreadsheet without giving it credit for hoped-for appreciation.

You said your goals are minimizing risk, learning the market, preserving capital and staying in the game for a long time.

Those goals do not require buying something in the next six months.

That may be the biggest lesson your first deal teaches you before you even own it:

Sometimes underwriting correctly means discovering that the best property to buy today is none of them.

let me know if you want to connect

Nathaniel B. · Answer

Cameron, you're not missing anything, and your model isn't broken. It's doing its job. What's off is the expectation.

Here's the truth: in 2026, at these rates and these prices, a clean turnkey SFR or small multi bought with conventional financing does not cash flow on day one. That's not a spreadsheet error, that's the market. Your model is telling you the truth, and honestly most people don't build one this good on their first deal, so trust it.

You also buried the answer in your own post. You said you accept minimal cash flow and you're leaning toward newer properties, appreciation, low fix-up. That's a coherent strategy, it's just not a cash-flow strategy, it's a low-risk appreciation and loan-paydown play. You're judging an appreciation play by a cash-flow yardstick and it's making you panic. Two different games.

Here's where I'd push you: your original instinct, the VA house hack on a small multi, was the strongest move you had, and you broadened away from it. That's the one structure where the numbers actually can work at today's rates. Zero down, owner-occupied rate (much better than an investment rate), live in one unit, rent the others. You offset your own housing cost instead of needing rent to cover a full investor mortgage. For your exact goals, minimize risk, learn the market, get in the game, that's about the ideal first deal. I'd go back to it.

You asked where the line is. A property that loses money every month fully rented is a liability, pass. A property that breaks even or is slightly negative after a reasonable down payment, while a tenant pays down your loan and you're betting on Savannah's growth, is defensible IF you have solid reserves and you're honest that it's an appreciation play, not income. The danger is negative cash flow plus no reserves plus calling speculation an investment.

If you want more than that, the ambitious-but-safe version: buy a light value-add small multi, house hack it (VA or low down), live in it, improve it over time, and refinance later. That forces equity and improves your long-term numbers without the risk of a full flip on deal one. I'd leave flipping off the table entirely for a first purchase.

Bottom line: your numbers are right, your expectation is off. Go back to the house hack, or consciously accept a low cash flow appreciation play with reserves and eyes open. Don't force bad numbers just to get in the game.

Greg Scott · Answer

Without seeing all your numbers, I can't dig into how you are doing your underwriting, so I can only provide high-level ideas.

When we were analyzing the purchase of an apartment, my wife always wanted me to make every metric and line-item more conservative. In one way that is great. I want conservative underwriting. I want there to be a much higher chance my actual performance will exceed my underwriting than fall below my underwriting. The main problem with being too conservative is you might never buy anything.

It is more art than science to find that balance. People that let their emotions push their underwriting to be more aggressive so they can buy a deal, eventually get hurt. People that let their emotions constantly push the underwriting to be conservative, might never own anything. What seemed to work for me is underwrite the property. The next day come back and look at your numbers. I noticed that depending on my mood, I might be more aggressive or more conservative. If you look at a property over several days you will observe yourself going back and forth. Find the balance.

While I've never done a househack, the main idea is that you get to live much more inexpensively than if you rented. I'm not sure what your numbers are showing. Just because it shows negative cashflow is not a bad thing. If it is negative $200/mo, that is much cheaper than $1500/mo rent.

I've not seen your spreadsheet. From your description of it, you may have built a Ferrari when all you really needed was a Chevy. I always chuckle when I hear people get into an argument about metrics. People can be passionate about whether IRR or EM is the best metric. The problem is they are arguing about decimal places (and which model is better) when the underlying information is a FORECAST. The one thing I know about a forecast is it will be wrong. The one thing you said that peaked my interest was that you included legal fees. Except at purchase, I don't think I've ever seen anyone include that in ongoing operating expenses. That had me wonder how much stuff you've thrown into the spreadsheet out of conservativeness.

FWIW, without seeing any of the data, you probably would be better off using the VA loan and keeping cash in the bank. It is always good to have reserves for a rainy day. Real estate is a very forgiving asset class. You almost always make money, with one big exception. If you are forced to sell when you don't want to, you will likely lose big. What causes you to sell when you don't want to? It could be a lot of reasons, but the most common is running out of cash when a big expense happens.

Good luck

Shiloh Lundahl · Answer

@Cameron Whiteside I think that you are floundering a little bit with not knowing what to do because your strategy isn't absolutely clear.

When your strategy is clear it becomes obvious if a deal is going to work for you or not. If your strategy is wealth conservation and you've made a bunch of money and you want to conserve it in Real Estate then you buy properties that are at market value and have a property management company watch over it and you may not cash very much on it but it will likely conserve your wealth, and it will go up with appreciation.

If your strategy is get cash flow through real estate, then you need to be very particular as to what to buy and how you are going to run it so that you can maximize your cash on cash return. You may consider house hacking like you mentioned, or short-term renting. You may get the property closer to you so you can run over there and get things fixed with it rather than spending a lot of money hiring a handy many.

If your strategy is to build wealth in real estate then you may do things differently. Your focus may be on how you will acquire the property and how you plan to exit the property. Will it be a quick 3-7 month flip to generate capital to be redeployed into real estate? Will it be buying something that you can trade up within a couple of years. If so, the negative cash flow you may have during the project may just be part of your carrying costs that you need to take into consideration during the life of the project until you sell the property.

Currently I am flipping to generate some capital to pay off some debts. But usually my strategy is to buy and hold real estate and then to sell it on a lease with the option to buy to a tenant buyer that I bring in at the beginning. For my strategy to work well I have to buy the property at a high discount in order to create enough equity at the sale to where it is worth all of the coordination of the investment. So for me, I buy properties under market value from wholesalers, I will either fix them up or not depending on the property, and then I bring in a buyer on a lease option to sell them the property within a 3 year time frame. At the sale I usually get a $60,000 - $70,000 gain that is worth more to me than the cash flow I get over the 3 years I own the property.

So I would encourage you to start with what you want real estate to do for you, then choose a specific strategy in real estate that will help you get there.

Zack Karp · Answer

@Cameron Whiteside you have some very insightful answers here, and @Nathaniel B. is spot on. The VA house hack is your best option, hands down. Be patient and find the right one. It's not just that interest rates are higher now, it's also that property values keep climbing as well, so it's definitely more challenging to find cash flowing properties in 2026 than it was 5-10 years ago. Frankly the interest rates aren't high, they are actually around where they should be in a healthy economy. Property values though have already appreciated faster than normal in many areas. Especially 2-4 unit properties, where demand outweighs supply, thanks to BP and other teachings pushing the house hacking method the past 2 decades and exponentially raising demand while supply barely increases. What may have to change is your location in order to make the numbers work better. Or a value-add property that you can get at a slight discount. But one thing is clear, the VA loan is an unfair advantage and you would be foolish not to use it for your first property. Having little-to-no skin in the game, even if you are still paying "rent" for your unit until you move out, to acquire a property that your tenants will pay off in 30 years, is a no-brainer.

TYFYS and best of luck!

Drew Sygit · Answer

It is very difficult to find cashflowing rentals currently, unless you want to accept MUCH higher risk pursuing Class C and D rentals (DON'T DO IT!)

So, look to househack to cover a portion of your house payment - the more the better.

You can use MTR and STR to boost your income, but you should self-manage.

Denise Supplee · Answer

You've done a lot of homework, and I actually think your numbers are doing their job. They're telling you that the properties you're looking at don't work at today's prices and rates. I wouldn't try to fix that by putting more and more money down just to make the cash flow look better. Your first property should help you learn, not put you in a position where you're feeding it money every month. Look at more properties, different neighborhoods, and don't be afraid to consider an older property that may need some work if the numbers make sense. You don't have to buy just because you're ready to buy. Sometimes the best decision is to keep looking until the numbers work.

Wishing you much success!

Matthew Tregoning · Answer

If P&I already eats the rent, you aren't missing anything. The deal just doesn't work at that price and rate. A VA house hack can still make sense because it replaces your own housing cost. I used my VA loan too. Just don't force a bad rental because you're ready to buy something.

Ashish Acharya · Answer

Cameron, it sounds like your spreadsheet is doing exactly what it should. If the numbers don't work with realistic rents, vacancy, repairs and financing, that's useful information.

One thing I'd add from the tax side is to separate the house hack from the pure rental analysis. If you're living in one unit and renting the others, the personal and rental portions can have very different tax treatment, including how depreciation and expenses are allocated.

I'd also keep projected tax savings separate from your actual cash flow. A rental loss on paper doesn't necessarily mean you can immediately use that loss against your other income.

If you find a specific property you're considering, that's where looking at the after tax numbers could become much more useful.

Happy to connect!

Ryan Thomson · Answer

If you're running numbers on conventional financing at 6.8%+, the math is almost impossible to make work on a straight rental in most markets right now. That's not a Savannah problem, that's a rate problem.

Here's what I'd revisit before ditching the house hack strategy: assumable mortgages. Since you mentioned VA, you probably already know VA loans are assumable. FHA loans are too, by law. If you can find a Savannah property with an existing FHA or VA loan from 2020-2022, that rate is likely somewhere in the 2.5-3.5% range.

On a $350K property with a $300K assumable loan at 3%: your payment is roughly $1,265/mo vs $1,995/mo on a new conventional loan at 6.8%. That's $730/month difference per month. That gap is usually exactly why a deal doesn't pencil.

The equity gap is the tricky part. On a 2020 purchase that's appreciated, the difference between the purchase price and the remaining loan balance might be $80-150K you'd need to cover with cash, a second mortgage, or seller financing. But on a house hack where you're living in one unit, you've got more flexibility on that than a pure investor does.

I do these full time in Colorado, but the process is federally standardized. A good buyer's agent in Savannah should be able to filter for assumable inventory. Run the comparison math on any specific property you're looking at before you write off the numbers entirely.

Savannah First Rental Property - Numbers Aren't Working, What Am I Missing?

Savannah First Rental Property - Numbers Aren't Working, What Am I Missing?

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