Are you cash flowing around 10k a month in WA state?

[Jonathan M Peters]

I'd like to hear from all the investors that are cash flowing around 10k a month. I would love to be able to pick your brain and figure out how I can can create my pathway to 10k+ a month.

[Gabriel Graumann]

@Jonathan M Peters you're asking the right questions, and as Cory shared, understanding how your equity (or money in) is performing for you compared to other opportunities may answer your question for you, or at the least, will give you a baseline to measure other opportunities by.

The big disclaimer is you need to get educated on the process and pros/cons of performing a 1031 exchange. In summary, you are taking the net proceeds from one investment sale and rolling them into the next, bigger deal without touching any of those proceeds in the process, which then allows any taxes on gains to be deferred until you sell the new property. In theory, you could continue doing this forever, but that's a separate conversation all together. There are timelines to be aware of to locate, identify, and close on the replacement property in the exchange, so understanding those well in advance of any property sale you hope to exchange is major component.

Now, if you're simple looking for one investors opinion here is mine (and worth the price you paid). I want my investment dollars to work and return as much cash flow as possible while providing long-term equity upside, so to accomplish this I look for commercial value-add deals which provide me the maximum tax incentives, write-offs, depreciation, and least amount of hands-on time/energy/headaches. Granted, I've been actively engaged in the commercial real estate industry for 17 years so I know and understand this space well, so for me it's likely easier than for other investors new to all real estate types.

That said, there is a reason that many of the investors who've been interviewed on BP, written books, and grown a portfolio often scale or "trade up into commercial" over time, so they can achieve the benefits I mentioned above. For instance, if you have 50 residential units, with 50 roofs, 150 toilets, 50 hot water tanks, etc. you have a huge liability at any given moment where nearly all of the repair and maintenance expense is on you. In commercial investment properties, this is almost the exact opposite.

Even if you had 50 separate tenants, the leases are structured in a way (or should be) where each tenant PAYS YOU an estimated amount of your annual repair and maintenance budget, taxes, insurance, property mgmt, landscaping, HVAC, etc. plus are required to pay for nearly all repairs within their own space if they occur. Also, many commercial leases are for a term of 3+ years terms, so the turn over is much lower than residential in most cases, because it's expensive for a tenant to relocate their business. You still get appreciation, you get cash flow, you get heavy tax incentives, but the involvement I've found to be considerably less than residential.

Not sure if this helps or muddies the water, just sharing what I know. Honestly, if I only had $50,000 today to work with, I'd be looking for a fix/flip opportunity to grow the funds more quickly to allow me to get into a larger commercial deal sooner than later. The idea of tying up $50K for the prospect of earning a net 10% return of $5K isn't an attractive way to build and scale a portfolio.