Is my way of thinking OK or Im just making castles on the san

[Federico Cantero]

Good morning to all.

Im a newbe and Im struggling to make a decision over 3 Rental deals that I have on sight at the moment. The issue is the result on the rates Im getting for the first year of cash flow.

Two of the 3 properties have Negative ROI, Negative Cash ROI and a CAP rate below the Interest rate of the loan on the fisrt year of cahs flow. According to the info I have seen on BP and even the Podcasts, discussion always centers on the results you get from the First year cash flow analysis.

But turns out that on the second year numbers for this two properties become positive and even close to expected returns. For the third year, all numbers are OK.

So Im struggling with the decision, because everyone speaks so much over the Rates and the numbers you should get, but I have not heard anyone say, I will sit on it one year because this si a good deal once a year has passed.(or two or three)

So in general my question is:

To make a decision over investment to buy and rent a single unit, I must focus on the results Im getting only on the first year of cash flow, or the long run is a valid way to analyse the deal as well?

If long run analysis is valid, time wise, what would be a normal, standard, time to see a project turn in to the positive side?

At the end of the day my Business Plan is Rentals and Passive income, so Im willing to sit on the properties for some time.

Please, help, someone that has experience making decisions over longer periods than one year cash flow.

My absolute thanks in advance for your comments and suggestions.

[Jay Hinrichs]

then if you like the asset and you will be positive year two that's a no brainer for my way of thinking but most folks on this site are buying in the areas of the country were appreciation is a bonus ( at least that what they have been taught and what they repeat)... so its very foreign concept for them to remotely think about a property that is not cash flow positive day one.