• The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success
  1. Join 50,000+ entrepreneurs
    who are kicking butt and
    winning their dream life.

    Unscripted™ Entrepreneurship:
    A Business That Pays More Than Money, It Pays Time.

    "Fastlane" is an entrepreneur discussion forum based on The Unscripted Entrepreneurial Framework (TUNEF) outlined in the two best-selling books by MJ DeMarco (The Millionaire Fastlane and UNSCRIPTED™). From multimillionaires to digital nomads, the forum features real entrepreneurs creating real businesses.

    Download (Unscripted) Download (Millionaire Fastlane)  Register
    Registering for the forum removes this block!

Real Estate Cashflow and Appreciation

Discussion in 'Real Estate Investing' started by NoMoneyDown, Sep 6, 2007.

  1. NoMoneyDown
    Offline

    NoMoneyDown Contributor Read Millionaire Fastlane

    Messages:
    520
    Likes Received:
    57
    Joined:
    Aug 28, 2007
    Location:
    Round Rock, TX
    Rep Bank:
    $81
    The ultimate victory for a real estate investor is to acquire a property that both cashflows AND is in an area where appreciation should occur (whether it be quickly or steadily over time). However, for those that invest in real estate, would you still buy a property that cashflowed out-of-the-box, but had a history (and future) of not appreciating very much (if at all)?

    The reason I ask is that I found a 4-plex that will cashflow the day I buy it, but the region has not been good for appreciation nor does it look like it will (at least in the near future). I can get it without almost no money out of my pocket (80% bank loan + 20% seller carry - I'll just have to pay closing costs and inspection). My calculations show it to CF $350/mo on the low end and probably more like $450-$500/mo.
     
  2. NerdSmasher
    Offline

    NerdSmasher New Contributor Read Millionaire Fastlane

    Messages:
    153
    Likes Received:
    16
    Joined:
    Aug 31, 2007
    Rep Bank:
    $51
    Well, I'm no expert... but it looks to me like all you have to do is sign a few papers, make a few calls, and you'll have $350+ per month, without investing any money at all. That, my friend, is infinite ROI. However, I can see where you would worry, if you ever wanted to get rid of the property; but you could always do a few little things to make it look better if you're trying to sell later on.
    And, who knows, maybe this will be the year that the market in that area decides to go up! If not, so long as you can keep the house cashflowing, I don't see what the problem really would be... It's just free money!
     
  3. kurtyordy
    Offline

    kurtyordy Bronze Contributor

    Messages:
    2,376
    Likes Received:
    275
    Joined:
    Aug 28, 2007
    Location:
    PA
    Rep Bank:
    $235
    For me cashflow is always king. If it is cashflowing, you can afford to sit on it for 100 years. I imagine that after 100 years there will be some appreciation. OF course the holy grail is to have both.
     
  4. SteveO
    Offline

    SteveO Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR Summit Attendee

    Messages:
    3,494
    Likes Received:
    13,863
    Joined:
    Jul 24, 2007
    Rep Bank:
    $96,023
    You can never argue with cashflow for nothing down. These deals are very rare though. You may want to double/triple check your calculations. You could probably get some input here if you post some of the numbers.

    I am a strong believer in buying undervalued properties that can be increased in short order. There is a lot more money in that process.

    Your deal would add a lot of experience to the overall understanding of the market. There are always a ton of learning experiences that come with any transaction. If multifamily is the route you want to take, a low risk deal is a great way to start learning.

    Keep in mind that people rarely purchase a property and find that the cashflow is higher than they calculated. You need to do your due diligence to insure you will be positive.
     
  5. NoMoneyDown
    Offline

    NoMoneyDown Contributor Read Millionaire Fastlane

    Messages:
    520
    Likes Received:
    57
    Joined:
    Aug 28, 2007
    Location:
    Round Rock, TX
    Rep Bank:
    $81
    Thanks everyone. My thinking was to go forward, too, but just wanted some feedback. I'll post my spreadsheet with numbers when I can.
     

Join 1000s of entrepreneurs who are rewriting life's script and winning financial freedom.

---- ----

You must be a member to join the conversation.

Create Account

Join the community fast and easy!

REGISTER

Log In

Already have an account? Login here.

LOG IN

Share This Page