Generating $100 of cash flow?

[Elsa M.]

Hi everyone, this may sound like a silly question but Brandon Turner has mentioned several times in his webinars on analyzing rental properties, that his goal is to at least profit $100 cash flow per unit (and 12% ROI). Doesn't $100 a month seem low? This doesn't motivate me, what am I missing here? Wouldn't it take A LOT of rental properties to have a cash flow of, lets say $5,000 a month?

Can someone please explain why $100 a month is actually pretty good?  

P.s. I do not have a rental property yet, looking to house hack a duplex soon. 

Thanks guys!!

[Alexander Felice]

$100 per month doesn't seem like much. It didnt' motivate me when I was new either.

There is more profit here, but it's harder to see.

1st off, your $100 is a return of WHAT amount? If you put $10,000 in, and earned $1200 for the year, that's really good. What if you earn $100 and having nothing invested. That's free money.

What about appreciation, the house might go up in value

What about amortization? The loan is going to get paid off by someone else

What about depreciation? The government is going to give you tax breaks for investing.

What about in 5 years when that rent gets raised by $100-$150? What happens in 15 years.

and yes, if you want $5,000/month cash flow @ 10% CoC then you need $600,000 cash invested.