Cashflow by Any Means Necessary

[Hunter Bentz]

I've posted a couple of times in the forums and I have already learned a load of new and useful information. I am once again asking for the wisdom of the BP community. My question is: 

if my goal is to generate cash flow in the short term, would it be effective to have a large portfolio of cash flow properties? Regardless of ROI, cash on cash, and other micro metrics used to determine deal viability. Then, reinvest and diversify down the line to create a more secure structure of cash flow after I've achieved my initial goal to general financial freedom by any means necessary.

The cash flow numbers would be ideally around 150-300 per door with roughly 20-30+ doors. Again, regardless of ROI and cash on cash, etc... Keep in mind, I wouldn't be investing if the ROI or cash on cash was atrocious, just if it were not ideal or below desirable.

I wasn't sure were exactly to post this so I picked BRRRR because it'd be the most likely method I use to obtain rentals. Any feedback would be appreciated and as always I look forward to seeing whatever collective wisdom there is to be shared.

[Nicholas L.]

@Hunter Bentz do you have a more specific question?  If you have a portfolio of properties that are positive cash flow - then yes, of course you'll be cash flowing.  And no, you wouldn't want to buy something "regardless of RIO and cash on cash"... then you might have a $1M property that nets $50 a month.  That would not be a good deal.

Separately, it's going to be very tough to BRRRR right now with rising interest rates, booked up contractors, and unpredictable appraisals. The value in BRRRR is not so much ending up with a cash flow monster, but rather having equity in the resulting property. You might get $50K or $100K or more in equity but not cash flow very much. I'd consider this a good deal but it might not align with your goals.

[Eliott Elias]

If you only want to cash flow you need paid off properties that produce great rents. If you want to build wealth have 50+ properties that cash flow 2-300 each 

[Hunter Bentz]

Hi, Thank you for the response! As for being more specific, I suppose the question really boils down to if I only want cash flow in the short term what is the method I should use if not BRRRR? Furthermore, if the cash on cash and ROI being optimal at numbers around 10-12% would it be viable to take 150+ cash flow at cash on cash and ROI at Sub 12%, around 6-8%?

[Joe Norman]

Quote from @Hunter Bentz:

Hi, Thank you for the response! As for being more specific, I suppose the question really boils down to if I only want cash flow in the short term what is the method I should use if not BRRRR? Furthermore, if the cash on cash and ROI being optimal at numbers around 10-12% would it be viable to take 150+ cash flow at cash on cash and ROI at Sub 12%, around 6-8%?

Of course its "viable", whether it makes sense or not just depends on your goals. It also depends on how much money you have to invest and where you're investing. 

[Billy Daniel]

I don't think anyone is going to tell you whether your thought process is right or wrong.  I personally always look at cash flow as my primary metric for a buy.  The others you mentioned are just for fun.  I'm in my properties for the long run, so cash flow is really the only thing that matters, aside from appreciation.

Others are going to want to know those metrics so they can make more informed decisions with their money that more directly line up with their goals.  It's all about your individual goals.

Cash flow from day one is getting hard to find without a significant down payment. So you may have to deal with less than stellar numbers when it comes to ROI and COC.

[Conner Olsen]

Quote from @Hunter Bentz:

Hi, Thank you for the response! As for being more specific, I suppose the question really boils down to if I only want cash flow in the short term what is the method I should use if not BRRRR? Furthermore, if the cash on cash and ROI being optimal at numbers around 10-12% would it be viable to take 150+ cash flow at cash on cash and ROI at Sub 12%, around 6-8%?

If you really want cash flow you should look into STR and MTR. They are some of the best ways to force cash flow in this market.

[John Hernandez]

@Conner Olsen

Just a question so I can understand: how would define STR vs MTR vs LTR?

[John Hernandez]

@John Hernandez *you

[Conner Olsen]

Quote from @John Hernandez:

@Conner Olsen

Just a question so I can understand: how would define STR vs MTR vs LTR?

STR - Furnished property rented for less than 30 consecutive days to the same guest
MTR - Furnished property rented for more than 30 consecutive days to the same guest
LTR - Unfurnished property rented for 6 months or more (typically 1 year long lease)

[Ricardo Hidalgo]

Quote from @Hunter Bentz:

I've posted a couple of times in the forums and I have already learned a load of new and useful information. I am once again asking for the wisdom of the BP community. My question is: 

if my goal is to generate cash flow in the short term, would it be effective to have a large portfolio of cash flow properties? Regardless of ROI, cash on cash, and other micro metrics used to determine deal viability. Then, reinvest and diversify down the line to create a more secure structure of cash flow after I've achieved my initial goal to general financial freedom by any means necessary.

The cash flow numbers would be ideally around 150-300 per door with roughly 20-30+ doors. Again, regardless of ROI and cash on cash, etc... Keep in mind, I wouldn't be investing if the ROI or cash on cash was atrocious, just if it were not ideal or below desirable.

I wasn't sure were exactly to post this so I picked BRRRR because it'd be the most likely method I use to obtain rentals. Any feedback would be appreciated and as always I look forward to seeing whatever collective wisdom there is to be shared.

 My worry with 200-300 in cashflow is that 1 big expense on one of your properties could potentially make you go negative or break even. I don't necessarily look at amount of properties but how much those properties are generating me. I think that margin is very low on liquidity unless you are pursuing appreciation based properties to counter balance the cashflow. 

[Tanner Pile]

In Colorado Springs the best way to generate a large amount of cash flow short term is by having a large portfolio of STRs or renting by the room. These two strategies will get you to that goal faster. 

You can get $100-200 per door on a long term rental in Colorado. STR will be closer to $400-500 per door if done correctly. This is based on the personal numbers I run when analyzing deals In Colorado Springs