All Forum Posts by: CJ M.

@Victor S.

That is correct. I take gross rent X 0.25. That said, I now have enough cash reserves to cover most major things, so I'm toying with the idea of ignoring the 25% altogether to grow quicker. Then, if I did have to dip into my reserve, I would just replenish it immediately.

@Ben Wilkins

Hi Ben, I'm purchasing with cash at below market value rates. Then I'm doing a refi immediately to replenish my reserve. Usually at 70-80% LTV.

@Ola Dantis

Thanks for commenting Ola! My strategy is buy-and-hold until financial freedom.

Thank you everyone! Sounds like I need to just stay the course and continue doing what I've been doing.

@Lexi Teifke

I see you're in Austin (I used to live 45 min outside of Dallas). My guess is while CF is lower you're getting pretty explosive appreciation where you're at?

For me, I'm investing in an area with probably little to no long-term appreciation :-/

@Kris Wong

Private lending that isn't subject to FM/FM guidelines. So far I've been at 70-80% LTV, and 6-7% APR. Amortization is anywhere from 30 year term, to 5 year arm (w/1% max cap every 5 years).

@Adam Apalategui

Thanks Adam. These particular properties are rehabbed turnkeys in the $50-$70K range, so very minimal time on my end.

I just don't see how I could get $1000 in rent and after PITI and allowances still net $400-$500 in CF (without taking a hit on the CoC return).

My feeling is, if I can purchase a rehabbed property that cash flows for no money out of pocket, it's worth the lower CF...unless I'm way off base here.

@Lexi Teifke

Thanks for the encoragement Lexi. Yes, the return is solid, but hearing folks saying their min CF is something like $400-$600? made me want to pose the question of lower CF but high return.

Hello,

My turnkey/rehabbed SFR properties have yielded CoC of approx. 75-100%+ (after refi). The average cash flow of all of them is just over $200 per month per door. I'd very much like to continue this strategy as I can grow very quickly, but is the cashflow too low? Obviously the higher the better, but I can possibly do 5-10 more of these type of deals soon. I like this approach however I want to make sure that when I'm planning my long-term growth goals, I'm being smart.

Thank you in advance.

P.S. For the purpose of this question, I'm calculating cash flow as (gross rent) - (PITI) - (25% allowances for everything else).

@Brian Lipszyc

That's awesome to hear that! It sounds like he was frugal, not cheap...which is a positive thing.

The "being cheap" method Robert Kiyosaki mentioned was more condescending. In essance, he said the problem with becoming a millionaire by being cheap is that once you're a millionaire, you're still cheap. And other millionaires don't like cheap people.