Rental Income Tax - 250k SFH and ROI of 4.8%

[Khoi Nguyen]

After doing analysis on a 250k SFH, we find out that the Monthly Cash Flow will be $200, yielding a Cash on Cash Return on 4.8%.

I do think tax will be a decisive factor (Depreciation, and all) when buying a property but my wife thinks otherwise. Please advise.

Thank you

[Drew Sygit]

@Khoi Nguyen guessing you're buying a Class A property? They rarely actually cashflow the first 3-5 years, but appreciation MAY make up for that.

At least 80% of "real estate investors" are really hobbyists.

Why?

They're buying SFR properties at retail prices!

We did that on the first property we bought, then never again.

As an investor you should be patient and look for deals that meet one of the following:

1) You buy below market value
2) You buy with little to nothing down
3) You buy with seller financing

This past December, we bought a package of 4 Class B- properties that met ALL 3 of these!

You also have to make sure you have a clear vision of how an acquisition will make you money and have as many exit strategies as possible.

80%+ of investors hire a Realtor to find them a property. That Realtor solely looks on the MLS.

We've only done one transaction via the MLS (out of 20+) in the last 10 years. Even on that one we got seller financing and low down payment, something our agent was shocked was accepted.