140k at 1,250 rent

[Paul S.]

There are many properties for sale in my region, but may not cash flow. Here is an example (remember that this is California)

$140k for 1,400 sq ft
3 bedroom, 2 bath
Rental rate = $1,250 a month

At 20% down, that would leave a $112k mortgage for $567 at 4.5% for 30 years. Property tax would be around $2000 a year ($167/month). Landlord insurance might be around $800 a year ($67). So that totals $801. Is that close enough to possibly cash flow?

[David Beard]

I personally think it's somewhat foolhardy to buy with zero cash flow. Appreciation is anything but assured. It appears that there are hundreds of SFR listings in the Sacremento and Stockton vicinities priced at 60k or less. Surely there are good cash-flowing rentals in this group. Don't be afraid to buy a foreclosure or short sale. These are where the deals are. Just work with a reliable agent, contractor, and property management company to evaluate the property prior to bidding. Look on CL to see where houses are being offered for rent in the 850-1000 range, and target your neighborhoods.