Breaking Cashflow Rules - Worth the Equity?

[Brad Jacobson]

I'm about to acquire three doors (one single fam and one duplex) at a great price from a motivated seller.  Should have at least $100,000 in equity between the three and they're all very much rent-ready.  

The seller needs the sale funds so no seller-financing is available.  With 20% down and a conventional (around 7.25%), the cashflow is going to about break even despite having 20% down and an extra $100,000 in equity.

My long term goal is to have 20 doors in my local city and so I'm anxious to buy and hold - but I've never broken my own cashflow rules before.  I'm in a position where I can handle negative cashflow if I need to, but who wants to do that?

Is the better option to sell the units and cash out on the $100k and then continue to struggle to find cash flowing deals in my local market - OR - do I just sit on the properties until rates come down and build on their potential as long term holds?  

[Eliott Elias]

You should be flexible with your investing criteria, not all deals are created equally. Trading cash flow for equity is a good play.