Updated almost 3 years ago on . Most recent reply
Cash flow vs equity?
I'm writing this post to get everyones opinions on a deal I'm considering.
All of my previous deals I have purchased were for cashflow. This deal I'm considering has minimal cashflow( 1K-2K a month) but has a high equity potential (500K).
Deal break down: 17 houses ( 3bedrooms/ 1 baths) that have been maintained very well by the same owners all within in a mile radius. Each house rents for $750-800 a month. The seller will sell the homes for $1,275,000( $75,000 a house). I'm a realtor and I know the market well each house is worth 105-110K. Also the seller has sold two homes for $105K each over the last two years.
This will be my biggest purchase and I'm worried on the low cash flow.
What are your opinions on cash flow vs equity ?
Most Popular Reply
If the rental income is currently below average and you have the opportunity to increase it over the next two years by making some cosmetic improvements, it's worth considering. I would make sure I have sufficient reserves in case something comes up.