HELP: Positive Cash Flow ?? - Boston South/Cape Cod

[David Ward]

Newbie contemplating RE market. I have 20+ years of experience in business but the concept of positive cash flow has always tricky to ME.  

Devil's Advocate:  If I put 20% of my money down, I struggle with the concept of positive cash flow as my down payment is now tied up and is NOT being taken into consideration for the "cash flow positive" scenario.   Additionally, in my mind, I say I could put 100k in Apple or Amazon and prob make more without lifting a finger.  Now don't get me wrong, I get the someone else is paying down your mortgage, forced appreciation, tax benefits, diversification etc.   But the numbers don't seem compelling to use my 100k to essentially subsidize others to live in my property.  What am I missing?  Do I determine cash flow positive with my 100k in property or without?  When most discuss cash flow positive examples they usually look like this to me...500k property, 100k down, mortgage 400k...if the property profits 300-500 per month, I feel like the 100k of my capital is being tied up to create the "positive cash flow and/or subsidizing someone else".   Am I correct, am I missing something ?

RE Advocate:  On the flip side, my friend owns 20+ units and always says "you need to find positive cash flow properties".  He's uses a formula uncovered 5 years ago while he attended an investor conference focused on identify "positive cash flow" properties.   (IN HIS MARKET) monthly gross revenues x 7 x 12 months in a year = purchase price.  IF the property is in great condition he adds 10%.  Example, 3 family property lists for 600k, each property is renting for 2k each (6k per month).  That means 6k x 7 = 42k x 12 months = 504k purchase price.  

Bottom line - His formula does not work in my expensive market.  None of the 50+ properties I've analyzed = PROFITS.  Almost all = being underwater.  The properties in Boston South are high due to metropolitan location but I'm always 200-300K UNDER asking price using his formula. Thoughts ? 

I'm really struggling with how to determine what is the BEST FORMULA to determine/analyze a positive cash flow property when purchased price is higher, particularly bc I would easily need to put down 100k, not the 10-20k that some people need for low end markets!  Please help...

Thanks you!