Negative Cash Flow

[Adam Juodis]

Hey guys, I'm a super noob( I literally got into this 2 days ago, but I've spent all my free time doing research). So I'm gonna pose my question through this example:

Say I buy a 100k property with 20k down. I find a tenant to occupy my property, but due to certain circumstances the amount I can rent for does not exceed mortgage and other expenses. Let's say my cash flow after cole ting rent and paying fees is -$75 per month. 

Even though I'm losing $75 per month on average, eventually, the tenant will pay off my property(10yrs?), and then my property will most likely, after appreciation, be > $100k. Even if it stayed around buying cost, I now have a paid off house that I can continue to rent mortgage free, or sell.

I guess what I am tying to get across is that real estate is a ssuper solid investment that is low risk, even if you are receiving cash flow. Sure, investors desire positive cash flow, but even if you have to pay a bit out of pocket each month, in the long run you still have an asset that is valued much more than you put in to it.

Please scrutinize my thoughts. Am I thinking right about this? Any advice would be greatly accepted. Thanks!

[Joe Villeneuve]

Never buy for negative cash flow.  That means you are paying down the mortgage...not your tenant.

As far as cash flow not being profits, that's ludicrous. 

Banking on events in the future that you have no control over is speculative, and risky.  Banking on current positive cash flow is not.

Oh, and here's the big one.  How many negative cash flow properties can you afford at the same time?  How many positive cash flow properties can you afford at the same time?  How many additional properties can you buy using the negative cash flow from the negative cash flow properties?  How many additional properties can you buy using the positive cash flow from the positive cash flow properties?

One more thing.  If you are buying correctly, that positive cash flow property should have as much future gain as the negative one.  Which would you rather have.

OK, I guess two more things.  "Cash flow is for poor people and poor investors".  I buy for cash flow.  WOW.  I love being "poor".