What is a reasonable return

[Doug Pape]

I have 300k and looking to turn it into 4-5k monthly net cash flow with SFR or mulitfam rentals. Am I crazy or this a reasonable return.

[Will Fraser]

Hi @Doug Pape, certainly that's reasonable*

*Reasonable, however, is a very subjective term, so here's some more clarity on the nuances here:

$4,000 monthly cashflow equates to a 16% cash-on-cash return for your capital amount.  To turn $300k into a 16% or better ConC return right away you'll:

• Buy in a pure cashflow (no appreciation) area that returns extremely high cashflow, with corresponding issues to mitigate the returns.  It's an option, but certainly not one for everyone.
• Buy things that claim to be 16% or higher ConC but prove, like the market general does) to return closer to 6-12% for quality properties in linear markets.
• Lose your sleep and maybe your shirt in some bad investments attempting to make the market return higher than it is generally willing to return.

However, if you are patient with this approach, you could grow your equity pile to a point where a $4-5k per month cashflow is readily attained, and in a way that you'll not rue the properties that you bought to get you the cashflow.

Totally depends on your goals and the timeframe, but SFRs and Multifamily is a great path to cashflow and total wealth!