Only $85 in Cash Flow?

[Pete Abilla]

This is a hypothetical example, but I'd love to hear everybody's advice. Imagine the following scenario:

Suppose you bought a SFR at a good price (20% below retail) and made very conservative estimates for water, garbage, vacancy, property management, capex, and repairs.

The unit is fully occupied receiving at-market rents.

But after all that and debt service, the cash flow is on $85.

How would you justify this situation to someone who is skeptical about entering the real estate rental market?

Edited: Current location is a cash flow market, low appreciation.