How easy is it to produce $1000 in cash flow from 100k with RE?

Question

How easy is it to produce $1000 in cash flow from 100k cash invested in real estate? Where would I have to invest to produce $1000 in cash flow with 100k cash ? Are there any turnkey companies that I could do this with? What are the methods?

Can a newbie do this? If not, what would be a more realistic cash flow number with 100k cash invested? I want to know the cash flow # I can produce easily with 100k cash invested in real estate basically.

Brett Goldsmith · Answer

Yeah, it's possible. Example: Purchased duplexes cash Est. 75K in MO and their gross rent are 1600 total a month. After expenses it's about 1100-1200 each when averaged out. Shouldn't be too tough to find homes around 90-100k and get Est. 12% return if you look around enough. It's important to know depending where you look you may not get much appreciation. Always remember that buying real estate is more than just numbers. Doesn't matter how good the numbers look if you can't collect rent or find a tenant.

Terry Lao · Answer

@Tom Smith

Looking at it from the 1% rule, buying RE for $100k and get $1000 a month in rent? We are not talking about expense, just gross rents of $1000.

Answer. Yes. There are duplexes in Cleveland, Ohio, where you can buy for 80-100k that will rent for $700 each, or $1400 for both.

Terry

Charles Worth · Answer

@Tom Smith

First off this is not advice and should not be taken as such just my thoughts.

First, what is your situation? Is this your only $100K? How much would you miss it if you lost some? Do you need the income? How much time do you want to put into this including learning, traveling, managing etc.? Do you want monthly checks or lumpy income is ok? All these things will greatly influence the strategy you take. Without it very few can tell you the answer to your question. Yes many people I think can hit those numbers, butthe flip side is many of them put a lot of time into this RE thing and others are taking on risks to do so (some good risks some not so good).

Second, I think the fact that this didn't get a sure can do it no problem should tell you something about the market today. The great thing about BP is you can go back in time and if memory serves me correctly this question has been asked before and people were a lot more positive. Fact is, returns have come down because prices went up. Going back to the questions above I don't know what your situation is but assuming its more of a passive investor (by location) keep in mind many people on here have to invest you don't.

Third, if you don't need the income now you might want to think in terms of total return and not just cash flow. You might not get a check every month but if the return on the total investment is good I see it as the same but I also don't need the money to live on today.

In the end, I certainly know people making that. Some are even doing it on debt investments which are more secure than equity. Issue is they are subject to risks. If you lend to a flipper you might end up with less or it might take longer meaning your yield would go down. It might still be safer than equity but its still not money in the bank every month no matter what.

For equity, its really the same story yes its possible but you probably have to put in work or take some risks. I have turnkeys that those numbers but then sometimes they don't give me anything in cash for a few months. I also have flips, again same story sometimes I get as big check and sometimes it takes longer and the check is smaller. On average I am hopeful to be at much higher than your number (as it should be for the risk) but maybe not and I have certainly had my fair share of war stories.

Ernesto Hernandez · Answer

10% Cash in Cash is not at all unusual. May have to leave your home market. I don't see it in the Bay Area anymore but it's out there.

Matt Motil · Answer

Some of our private lenders are making 12% on their money. This would be $1000/month on $100k invested. So I would say this is very easy to do.

12% ROI on a leveraged purchase is even easier to do in certain markets.

Michael Bishop · Answer

@Tom Smith easily attainable if you invest it correctly.

In syndication for example, the standard is an 8% preferred return (the limited partners receive 100% of profits until 8% annually is met), 70/30 split thereafter. This is as close as you can get to guaranteed and is the bare minimum. More than likely you'll see a 8%+ CoC (think 9-11% ish) and an IRR in the 16-23% range. These are also conservative projections (if they're not conservative, I'd say to avoid investing with that Sponsor), with good Sponsors often exceeding them.

William Hollifield · Answer

I think it would be possible depending on the deals you could buy multiple properties and use the brrrr strategy. This would allow ur money to work harder, allow to get more for your money, but would need to find great deals. I recommend oos investing and learn about brrrr.

Grant Rothenburger · Answer

@Tom Smith I think that is a pretty attainable goal and can happen multiple ways. From using 100k for a down payment on a multifamily property to purchasing a couple of mobile homes. Depends on how you want to do it, but definitely attainable as long as you buy correctly.

How easy is it to produce $1000 in cash flow from 100k with RE?

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