$12000+/yr cashflow per SFR?

[Aaron Z.]

I currently operate in an investing niche where I can buy SFR's and rent them at $12-15k net income per year. But each transaction requires that I keep between 50-80k tied up in each property. My question is whether this is a good place to put my money to work? My immediate alternative is to buy duplexes that cash flow about 3k per year but They require little to no money tied up in them (varies from money in my pocket after refi to 10k left in), using the BRRR method. Obviously the BRRR method is more sustainable since it requires less Capitol and the COC ROI is higher but there is a tradeoff on # of hassles & headaches with significantly more doors. Appreciation is not something I can count on in either case so that ain't being considered as a factor. Also both figures above are for a PM managing them. Part of me really likes the efficiency of max cash flow from a minimum number of properties. I'd really love to hear from anyone who's got a different perspective. I feel like I am missing something. Thanks!

[Thomas S.]

I find it very difficult to grasp the concept that after expenses a SFH can cash flow $1000/month. Can you show us the numbers. Property value, estimates on long term expenses, vacancies, evictions, mortgage etc.

Have you included the fact that the opportunity value of the cash in the form of equity is costing you $400 - $660/month of the top of your gross rental income.

My guess is that you are possibly using yesterdays numbers to calculate cash flow as opposed to the next 10-20 year estimates.

My opinion is any return on zero investment is always the best investment. I'll take 500 of those.