Posted by john on March 07, 2007 at 20:36:27:
Thanks. That’s what I thought. I am looking in other areas and was
considering a flip. I just wanted to know if I was crazy to expect some
cash flow. I’m not expecting $1k a month but was hoping for between
$100-500/month per property. To do it for the future ONLY or to pay
out of my pocket just seems silly. Thanks again.
Expecting cash flow. Unreasonable? - Posted by john
Posted by john on March 07, 2007 at 09:35:13:
I have looked at a lot of 3 family units in my area. After expenses and debt service most seem to negative cash flow. Are these houses just overpriced? The rents and asking prices seem about right but the numbers just don’t work. It seems silly to PAY $500/ month to own one of these “investment” properties. I understand the tax benefits, the mortgage paydown with OPM and the appreciation but it seems like I should expect to break even or get some small amount of cash flow. Am I wrong about this?
Look elsewhere - Posted by Jimmy
Posted by Jimmy on March 08, 2007 at 07:52:13:
Ilived in California for 20 years, and never bought an investment property there. extreme negative cash flow was the norm. so I started bbuying stuff 2000 miles away in a little corner of Texas. very positive cash flow. which makes the business repeatable and sustainable.
if you have significant income, and can afford to carry a property, California will reward you in the long term. but if you want the property to carry itself, and even put some cash in your pocket, look to the middle of the country
Re: Expecting cash flow. Unreasonable? - Posted by ken
Posted by ken on March 07, 2007 at 21:50:27:
Be patient the prices will come down
Re: Expecting cash flow. Unreasonable? - Posted by Parsa Sepahi
Posted by Parsa Sepahi on March 07, 2007 at 11:25:00:
What loan to value are you looking at? how much is te asking price for these properties?
Re: Expecting cash flow. Unreasonable? - Posted by john
Posted by john on March 07, 2007 at 12:34:15:
asking $399k and 419k. I’m looking at 90% LTV. But even if i put down
more I won’t get enough cash flow to warrant putting down more. It
will negative fow less.
Re: Expecting cash flow. Unreasonable? - Posted by Parsa Sepahi
Posted by Parsa Sepahi on March 07, 2007 at 12:53:44:
I understand, I have had clients before from CA that because of the high price they were not able to cash flow on thier purchase for rental. I would find properties at a better price range or look for a commercial deal at that price point if you like to hold it for the long term, have you tried loopnet.com? if not then you can chnage strategies and go in short term (i.e. fix and flip) but the market is generaly not supporting this now in many areas