Cash Flow Question

[Jacob Eddy]

Alright BP folks, first question for ya!... So, when Brandon and Josh speak of finding a house that cash flows, are they saying that it needs to cash flow without any money down or assuming that the investor is putting down 20-30%?  Obviously, it would be better if it cash flowed without any money down, but is it still considered a good investment if you need a down payment to make it cash flow? Thanks!

[Jailen Holt]

Like you said, it would be ideal to be able to cash flow with no money down. The majority of people don't and aren't able to put down 20+%. To answer your question, yes, it could still be a good investment even if it needs a down payment to make it cashflow. The key is to buy it at the right price and have more than just one exit strategy. 

[Justin Fox]

Either really.  If you put 25% down and earn a 20% return, you'll profit in 5 years.  0 down and every dollar earned is profit right off the bat.

Ideally you don't want to have to wait for your down payment back before profiting, but you can utilize cash flow and equity paid down by tenants eventually to invest completely with money other than your own.  

[Jerry W.]

@Jacob Eddy, there are several ways to measure how good a deal is.  Cash flow is a good one, so is cash on cash return.  You would obviously cash flow if you paid 100% of the price in cash, but you could also put 20% down on 5 different properties that would each make you money.  Try using the BP calculator to help you figure out different measurements.  What is considered a good deal is also local.  What is good in one area might be considered a poor deal in other locations.