Negative cash flow for 2nd rental?

[Farooq K.]

I have a very good cash flow first rental and looking for possibly adding a second rental however most homes near me are 400-500k range Gilbert Chandler area and that’s the area I most likely want to invest in. Doing 25% down most these homes are like -300 to -409 cash flow. So does this make sense or what would you suggest here put more down like 40% I know everyone says use leverage and keep expanding and scaling but how do you do that when interest rates at 7% and cash flow is clearly negative. Thoughts? Also if town homes keep you out of negative equity are those a good idea ?

[Joe Villeneuve]

Quote from @Farooq K.:

Quote from @Joe Villeneuve:

Don't buy it.  Why are you putting the priority of buying another property ahead of why you are buying another property?

Cause I feel like I need to expand real estate to build wealth etc. isn’t that what we are all doing gather as much real estate as possible? Or do most people here only purchase if the cash flow is positive??

Arbitrarily expanding RE isn't the way to do it.  Negative CF is an added cost that defeats the purpose of buying RE.  Equity is only valuable if you can use it.  A 100% equity property is nothing more than a trophy, with the cost to buy it based on how much cash you put into it.  You own the property, but the property owns the equity.  They are not the same thing.