How much Pos. Cash Flow is enough on investment prop? (5%, agent)

[gus030]

I am new to investment properities and looking to get in the door

I found some good 3 family homes that I would get between 500-800 a month more then what I have to pay in Taxes,Ins, and Mortgage.

Is this enough of a positive cash flow to purchase a rental property or will I end up losing money on repairs?

[wayne1234]

Originally Posted by gus030

I am new to investment properities and looking to get in the door

I found some good 3 family homes that I would get between 500-800 a month more then what I have to pay in Taxes,Ins, and Mortgage.

Is this enough of a positive cash flow to purchase a rental property or will I end up losing money on repairs?

I think it is one of the best times to find good deals.
1. Don't forget to factor in the cost of repainting & minor fixup & labor cost every two years.
2. add in HOA or condo,etc fees.
3.cost of reg manintance supplys & labor, that cost will depend on how old things are with house & if you have a picky or kinda lazy teant, & have to send people out to do small easzy things, it can add up.

4. You haft to factor in the vacancy rate of your area.( 5% ?, 12% ?
5. also unpaid rents.
6. Mgment fees, regardless whether you do mgment yourself or not, no one works for free, why should you. ( mgment fees reg around 8-12 %) of gross rents.

Depending on the investment & your own cash flow, it still my be a great investment with no cash flow, because of other factors.
Also it my be a verry poor investment, even with great cash flow for now, do your homework for that area & proprity.
I've been investing for years & love it.
let me know if I can help, if you need more info.

Wayne G.

[2bindenver]

Depends on the condition of the property - get an inspection. Plan on 10% of the property value in repairs a year. Some years more than others.

[wayne1234]

Originally Posted by 2bindenver

Depends on the condition of the property - get an inspection. Plan on 10% of the property value in repairs a year. Some years more than others.

Yes, Inspections can be well worth the money, I always like to learn something new, but I'm lost with your 10% of the propertys value in repairs a year. That would mean that a 50,000 house/condo,etc , 10% of that would be 5,000. that is high for labor & supplys for repairs EVERY YEAR, its possable depending on what you buy.
But for a small sfh in the city where I live ( Falls Church,Va) Its value is over 300,000. that would make 10% be 30,000 in repair cost, no way.
I spend about, less than 1,000 - 2,500 a year( per house) on repairs, but I save a lot by doing work myself & with labor worker, on my small rental houses.
I'ts allways better to plan on spending more, than less.
Please let me know what area & house prices, that rule applys? I'm not saying your worng, just wanted to know how your numbers work.

[Silverfall]

Originally Posted by gus030

I am new to investment properities and looking to get in the door

I found some good 3 family homes that I would get between 500-800 a month more then what I have to pay in Taxes,Ins, and Mortgage.

Is this enough of a positive cash flow to purchase a rental property or will I end up losing money on repairs?

Out here we have a 6-8% vacancy rate and most investors out here save 1-2% of the value of the home every year for repairs. I suggest putting that into a savings account so that if the furnace and roof need to be replaced in the same year you have the money there.

My personal pet peeve as a real estate agent is seeing poorly maintained rental homes. They kill the rest of the homes around them. I always feel bad for the homeowners. Please don't do that to the homeowners around your rentals.