50% Rule Cash Flow Guideline

[Travis Washington]

Hello BP!

So, what is your Cash Flow number you like to see after applying the 50% rule (and subtracting mortgage payments) to motivate you to move forward or lock down a deal?

IE: a place renting at $800 with a mortgage payment of $200.
$800*.5=$400 (50% Rule)
$400-$200=$200 (Cash Flow after 50% Rule and Mortgage payment)

[Joe Villeneuve]

Originally posted by @Logan Hassinger:

@Joe Villeneuve

less than 1 year is fast, how do typically finance your deals?

The one I'm closing on soon is just conventional with 20% down. My potential deal coming up will be owner financed but I'll need 25k which will be from 

1 - All cash in to buy/rehab.

2 - Do rehab (target time is 30 days or less)

3 - 10-14 days from rehab completion to 1st REFI (actually a Loan of Credit) which gets me 70% ARV, which gets me all of my cash back (sometimes more)...15 year amortization

4 - 6 months of seasoning gets me my long term hold refi (75% ARV). This is usually $100 + better on my cash flow due to 30 year amortization

5 - Repeat steps on next deals.  Actually this step fits in between steps #3 and #4