Cash flow vs appreciation

[Bugsy Sigel]

Happy Monday! I’m still a newbie in real estate investing, I would like to know what the senior Real Estate investors think about this. When it comes to investing, do you go for cash flow over appreciation or appreciation over cash flow? Example, 

a) cheap location, great cash flow

b) little expensive location and good appreciation 

[Marcus Auerbach]

You need both, at different times in different qualtities. 

Play around with the BP calculator - use a $1 million property - and study how the long term numbers change as you modify cash flow and appreciation.

You need CF to stay in business, but wealth is created from appreciation and deleveraging your loans. CF is just too slow and long term get's dwarfed by equity.

It also changes over time: when you start out you have to focus on CF. It fuels your growth, without it you can't build a portfolio. Later when you have built a sufficent stream of CF you can and should focus more on equity.