Matt Andersen,
I do not agree 100% with cash flow is king. Breaking even still entitles you to owning a property that someone else is paying for. If you are gaining an asset (property) but someone else pays for you to own it (tenant) then theoretically you are coming out ahead. Say 5 years down the road you have 5 properties that you would like to sale to provide the money for your own residence then you have that option.
The important thing is to make sure you make good purchases.
For example
Inv. A purchases a property that cash flows $150 a month. This equates to $1800 a year. Not a lot but it is profitable. 5 years later if the property does not appreciate or depreciate, Inv A. has made $9000. Not awesome, but still profitable. The greatest factor in this purchase though is the market. The home could have appreciated or depreciated significantly causing a great resale or a losing resale.
Inv. B purchases a property that cash flows $0 a month. This equates to $0 a year. 5 years later if the property does not appreciate or depreciate, Inv B. has made $0. Not profitable. Again, the greatest factor in this purchase though is the market. The home could have appreciated or depreciated significantly causing a great resale or a losing resale.
What I am trying to prove is that the $9000 made over the 5 years is not a huge amount and a great factor is still in the appreciation or depreciation of the property. If Inv. A made a bad purchase then the profit earned through cash flow will not necessarily offset the depreciation of the property when it comes time to sale. The same can also be said for Inv. B.
While a cash flowing property is great and gives instant results, the importance is in buying good deals. A great deal is a great deal. When the time to exit comes and you want to sale, if the purchases were not good purchases you might not make out as well as you hoped for.
Just my 2cents.