7/14/2012 9:55:59 PM
RE:Is it possible to get +ve cashflow from my 1st rental property
Nirmal and Shaun,
I think it is so awesome that you guys are looking for a way to build your wealth through cash flowing rental properties, even in markets that might seem tough. So a big congrats on that!
I do agree that if a property is negative cash flow every month, that it is a liability and not an asset. In some markets where the property values are high and therefore it is hard to find property with rental rates high enough to cover your loan costs and other costs, it is a good idea to find motivated sellers that have equity. When you find motivated sellers that do have equity, it is possible to structure win/win deals for the seller, yourself, and the tenant/new buyer.
Some strategies that will help make this work include wrap financing, interest only loans, etc. Many times you will find that sellers might be stuck on a certain price. Often times, the market just does not justify their asking price. When I see a property that has been listed a long time and the price has not moved, I get excited. The reason is simple, I know that their "hot button" is price. When they want price, I go for terms. Financing is much more powerful than price. I would much rather over pay on price but get good terms to where I can cash flow a property. I don't care about paying it off, I just care that it pays for itself and puts money in my pocket! Appreciation is always, just a bonus :) -
Another simple option is to find like minded investors in and invest in another market with them. I am a full time real estate entrepreneur in Arizona and we are seeing GREAT cash flow on properties. If you are interested in checking out what Arizona housing can do for your wealth strategy, go to my website here and contact me through it: http://mypadaz.wordpress.com/for-investors/