What is a good positive cash flow per unit for income property?

[Serdar Umur]

Hey there,

I am new to RE investing and bigger pockets. So thank you very much for your help. 

I researched this a bit but couldn't find a good answer.  I am trying to start this business in Southern CT. 

So, I have been looking at properties and they have been fitting the bill sometimes that they are witin 2% rule or close, they have potential.

I have been looking at single families or up to 4 units and I realized that sometimes single families have better cash flow than 3 or 4 units although single family is more expensive.

For example, $150k single family with $2,500 positive income vs. 3 units for $125K and $2,350 income. Numbers wise multi-unit makes more sense but when you consider that you need to deal with 3 tenants vs. 1, I am not sure if it still makes sense. 

Is there a rulle of thumb what an income per tenant that you need to deal with should be? 

Your help is much appreciated.

Thank you,

Serdar 

[Joe Villeneuve]

I look at a specific dollar amount as a minimum...such as $300/month after all expenses including mortgage payment (refi) and Property Manager.  I don't care what the percentage is since I can't spend a percentage...never found a store, service, or product that I needed to buy that charge a percentage. 

The monthly CF minimum is set based on your needs, financial needs, and you reverse engineer from those needs to the number you are looking for.  Example:  If I need to cover $4,500/month in monthly bills, and I can handle (or my PM can handle) 15 properties/month then my magic number is an average of $300/month.  If I have financial (number of loan limits) limit of 10 loans I can carry at a time, then that same $4,500/month goal tells me I need to average at least $450/month per property.

It's pretty straight forward.  Your financial goals for your bills dictate your needs, then you reverse engineer from there, when you get to where you are now, turn around, "and follow the breadcrumbs".