Real Estate Investing – Cash Flow

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Dollar cornerReal Estate Investing with cash flow – I love this stuff!  This is the magical goose that lays the golden eggs.  It’s not just a fable.  It’s a real thing & if you’re serious about real estate investing you’ll stop “flipping” properties & start cash flowing them.  Some people call it passive cash flow or dividend or return on investment – I just call it positive cash flow!  This is the actual dollars that come to you after you pay everyone else (debt, taxes, insurance, utilities, etc. ).  Robert Kiyosaki (famous investment author), would say, “if it puts money in your pocket it’s an asset.”  Basically, were talking about the rental business: residential, office, storage units, retail space, industrial, parking, anything that creates monthly income.  Focusing on rental income and not the current market value of the property is the cash flow paradigm: look at money in (rents) & money out (expenses & loan payments) equaling net income or positive cash flow.  If your positive cash flow is $5,000 per month and your property’s market value drops 40% but your cash flow is the same…..do you care?  Hell no!  As long as the cash flow is the same – it really doesn’t matter until you sell it.  The other great aspect to cash flow is if you reinvest some of it back in to the same property with smart upgrades & repairs – you can force appreciate (create growth).  Cash flow can give the property life or vitality.  If you can consistently set as side a little money for ongoing improvements it will most likely give you more cash in the future. 

 

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