What is the minimum cashflow you would accept for a rental?

[Yazan Ayyash]

Brandon recently said that $200 of cashflow after expenses (including mortgage) on a house is a homerun. I am aware that different markets produce different results, but what is the minimum amount of cashflow you would accept on a potential property? I am in Ottawa, Canada and apparently downtown SFH's and duplexes should go for a minimum of $1000 after expenses. Thoughts?

[Account Closed]

If you would like to, post all the numbers for the two properties you purchased and I will put the numbers in my number cruncher. Then, there are a few factors only you know because I don't know what the market is like in your area.

What did you like better about the two properties compared to others you looked at?
Total purchase price with all closing costs.
Re-sale value if you re-sold it the day escrow closed.
Property taxes, insurance, mortgage, trash, sewer fees, gardening and all other costs.
Rehab or repair costs when escrow closes.
Year built
How many years does the roof have left?
Percent you put aside for unexpected costs for sewer outside the house, plumbing, painting inside and out
Fence repairs and expected cost to remove or trim large trees.
HOA fee
Expected cost to sell the property
Management fees.
How long do you expect to keep the property
Monthly rental income when escrow is closed
How much can you raise rent the day escrow closes.
How much can you raise the rent every year.

I'm going to sound like a broken record because I say the same thing one or two times every day.

Put away all the rule-of-thumb analysis and write down this business model.

Good Investor's Creed

"I will only invest in a property when I have calculated and analyzed the investment so that I am 100% positive the money invested in the property will give me a 50% to 100% return on my money in 1 to 2 years. I will listen to the advice given to me by my broker and friends, but I will never make a decision based on their advice. I will always calculate my risks to reward.  I will not allow anxiety to cause me make rushed decisions. I would rather keep my money in my pocket and wait until I find the deal I am 100% positive about rather than take even the smallest risk."

Obviously, I just made that up.

How do you make 50% to 100% on your money every year. You keep your money in your pocket until you find a property that will return to you, in 1 to 2 years, 50% to 100% of the down payment. So, if you put $40,000 down on a property you want to earn $40,000, preferably the day you close escrow because the property is already worth $40,000 more that you paid, or you want to earn $40,000 in profit within 1 to 2 years through appreciation plus cash flow (but, for single family properties I don't include appreciation in my analysis). You look at hundreds of properties and crunch the numbers 100 times on each property. Purchase at auctions, from wholesalers, make hundreds of low offers, go to real estate clubs, etc.