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?

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.

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.

Divin Kanyama · Answer

You are not thinking about this the wrong way, @Cameron Whiteside . In fact, you are already doing more due diligence than many first-time investors. If the numbers are not working after including P&I, taxes, insurance, vacancy, maintenance, property management, and reserves, that may simply mean the deal does not work in today’s market—not that you are missing something.

For a first property, I would draw the line at a deal that can at least break even under conservative long-term rental assumptions. If it only works with perfect occupancy, optimistic rents, no repairs, self-management, or future appreciation, I would be cautious. Appreciation should be upside—not the only reason the property makes sense.

That said, house hacking is different from buying a pure rental. If using your VA loan lowers your personal housing cost while helping you gain ownership, experience, market knowledge, and loan paydown, a slightly weaker rental return may still be reasonable. But for a straight investment property, I would be much stricter.

I would focus on building a clear buy box: conservative break-even or modest positive cash flow, realistic rent assumptions, accurate tax and insurance numbers, manageable repairs, and at least one upside lever such as under-market rents, light value-add, or better financing. If nothing meets that standard, waiting is not failure—it is discipline.

I would also be careful using short-term or executive rentals to justify a weak deal unless you have strong local data and fully understand the regulations, utilities, furnishing costs, turnover, and management fees. If the long-term rental numbers are deeply negative, the short-term strategy may just add complexity.

Bottom line: the numbers not working is valuable information. You may need a different property type, a more specific neighborhood, a value-add component, a different financing structure, or more patience. I would rather pass on several mediocre deals than force the first one just to “get in the game.”

Arman Ahmed · Answer

I don’t think you’re missing anything. Sometimes the numbers simply don’t work at today’s prices and rates, and forcing the deal usually creates problems later. If cash flow is a priority, I’d expand the search beyond Savannah and compare Midwest markets, where the lower purchase prices can give you more breathing room while still offering long-term upside. For a first deal, I’d rather see you buy something that works conservatively from day one than rely on appreciation or optimistic rent projections to save the deal.

Jimmy Lieu · Answer

Great question and welcome to BP! I actually think you’re approaching this the right way, especially for a first deal. If the numbers don’t work after using realistic rent, vacancy, maintenance, management, and financing assumptions, I wouldn’t force the deal just to get into the game. A bigger down payment can create cash flow, but I’d be careful about using too much capital to make an otherwise weak deal look good. I’d work backward from the minimum return and cash flow you’re comfortable with, keep enough reserves for surprises, and only buy when a property clears that bar. Since you have VA eligibility, I also wouldn’t give up on the house hack idea too quickly. Even if the property doesn’t look amazing as a traditional rental today, reducing your own housing expense while learning to operate a property can change the math quite a bit. I’d also compare Savannah against a few other markets before deciding the problem is simply interest rates. I moved from Portland to Columbus in 2020 for similar reasons and found that changing markets opened up price points and rent ratios I wasn’t seeing elsewhere. There are still areas where properties around $120K–$180K can get much closer to the 1% rule, so sometimes the answer isn’t finding a creative way to make a deal work, it’s looking where the fundamentals fit your strategy better. Six months gives you plenty of time, so I’d keep underwriting deals and let the numbers tell you where to buy rather than feeling pressure to buy quickly. Happy to connect and answer any questions you have!

Joseph Zimmerman · Answer

Your expense list looks complete, so the spreadsheet probably isn't what's wrong. At current rates, most on-market deals stop cash flowing once financing and full management are in the numbers, and that's what yours is telling you.

Property management is the biggest single lever left. I self-manage both of mine from out of state and track the actual costs, so I know how much that line carries. Rerunning your model without it will tell you whether this is a bad deal or a deal that needs you to do the work.

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

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

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