Doing the math: Cashflow, Reserves, Mortgage

[Jim Truman]

Hello,

I'm running the numbers on properties and planning to purchase one over the next year if we can find the right deal. I want to make sure I'm properly calculating cash flow when comparing properties and talking with other investors.  

I read other investors on these forums making statements like they never purchase anything that cash flows less than $500/mo. This seems almost impossible to me unless I'm buying dumps and completely rehabbing the place.  

Take properties on Roofstock for example. Using the numbers they use for estimating expenses, property management, mortgage, insurance, and reserves, I can sometimes find a property that cash flows $500 or $800 per year. No way I'm finding homes that cash flow that much per month.

So I'd like to confirm, when other investors mention cash flow, are they always including ALL expenses, including set asides for reserves? Are they typically paying cash or 20% down? Of course I can cash flow if I pay cash but it seems most investors prefer paying the minimum down.  

I'm find waiting until I find the right deal but I want to make sure I understand what others really mean when they throw these cash flow numbers around.  

Thanks