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Updated almost 3 years ago, 03/09/2022

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33
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What is Considered Positive Cash Flow?

Posted

Hello all, I have a basic investing question: What is considered a positive cashflow when we borrow 100% of the money to invest in a property?

In general and simple terms, it will be the money I gain over the money I spend on mortgage and expenses on that property. But let's say I borrow 20% from my existing HELOC and use these funds to pay as a down-payment towards my next investment property do I need to consider the interest paid on that 20% as well as an expense for the investment property?

The reason I am asking this question is I have looked into a lot of properties and finding the ones with a positive cashflow is very less and 9 out of 10 of these positive cashflow properties are not meeting the requirement if I include the 100% borrowed money towards expenses. 

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