Care about cashflow now or later?

[Amy Wunderlich]

Hi BP,

I have question regarding cashflow and if all investors REALLY require it from Day 1. Here's the background:

I'm taking a course at UCLA taught by Jon Swire, the author of There's No Free Lunch in Real Estate, and he comes from a different perspective than I often see on BP. He advocates Los Angeles investments that typically do NOT cash flow year 1-2/3 (even through year 5 at times) but will lead to high cash flow in later years (and hopefully appreciation as a bonus); these are ideally debt-covering assets (ideally, right, if CapX doesn't slap your year around) with the goal is to buy and hold until the property is producing strong cashflow.

Is this really the mindset of LA investors? Jon is a LA commercial broker so he certainly has a bias to promote these types of sales.

Thanks for your input everyone!
Amy