Tuesday, January 7, 2014

Tip to Avoid When Buying Cash Flow Real Estate

  1. Leave out management, vacancy and maintenance in calculating cash flow – I see it all the time. Rent – PITI is used to calculate positive cash flow. If you do not have room for at least 10% property management, 10% vacancy and 10% maintenance then you could end up losing money over time. It is much more accurate to take 70% of Rent – PITI to calculate positive cash flow.

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