I love the monthly cashflow. Once you have enough cashflow to meet or exceed you bills you are retired. You work because you want to not because you have to.
My goal is 120k in annual cashflow that would retire my wife. That will happen in the next 5 years.[/quote]
How much positive net cash flow, as a percentage of total positive cash flow, should one expect on a rental property?
For example, I just paid 48K for my daughter’s house. I can reasonably expect to rent it out for $650/month. Debt service, taxes, insurance, etc. will run around $450/month. So, I’m expecting to see a net positive cash flow of around $200/month, or around 30%.
That is not bad. I like 20+%. I am averaging about 40% on all of my properties. I also have Equity Capture of about $250,000. Every year I get about $5,000 in principle paydown, and I get tax incentives (depreciation and expenses) of about $10-20k. All added up is I am doing really well. An apartment complex is next.
How did you get started? Was your first investment profitable or did you have to learn along the way? [/quote]
My first rental was the first house my wife and I ever purchased and lived in. We lived in it for 4 years and then turned it into a rental and still own it 8 years later. I did a cash out refi on this property in Oct 2010 to get $25k seed money. I then purchased my next 6 houses from December 2010 to March 2012. 2 days before closing on the first of 6 properties I was laid off from my job. My lender told me to go on ahead and buy the property. Got it renovated and leased, and my lender told me to go buy another one. I used the $25k and my unemployment benefits to purchase the next 6 properties and the rest is history. All houses are on a 30 yr fixed rate mortgage.
I am thinking of selling the houses next year to go buy my second apartment complex.
I have done a couple of flips but go lucky that I did not loose any money. I did not make any money but I got experience and knowledge from those endevours. I like rentals, and I have never lost money on them. It is a numbers game to me. It has to make money and not loose money.[/quote]
very appreciative for you sharing this info. I bought the house I am living in now mainly to turn it into a rental when the time is right. I was young, the market was crash and I just got my first real bonus so I figured I should grab it now when most of my friends are still renting and a few years down the road I will have equity and can start renting it or pull the equity to start financing a rental.
I first got the notion when I got hooked on the Rich Dad series of books and wanted to start increasing my cashflow, which is why i never thought about flipping, always wanted rentals for the cash flow and let the renters pay down the mortage and build up the equity to eventually sell all consolodate and move into bigger stakes with apartments/commericial etc and repeat the cycle. Just figure if I do not start now either educating myself and making action steps it will stay on the back burner.