All Forum Posts by: Mark Ferguson

 Your first post started with "Cash flow is for poor people or poor investors. Negative cash flow properties are so much better because the buyers for these properties are limited and poor investors are chasing cash faux." 

If that was supposed to be interpreted as you like both cash flow and appreciation then I am mistaken. I stated multiple times I like both, but don't thin investing for just appreciation Is wise.

This is going no where. Not sure why you feel the need to call investors who like cash flow "poor". It seems a little strange you count on 6 percent rent Increases on some properties but claim others will have no increase for 20 years depending on which Point you want to prove. 

 You can use extreme examples all you want. What do the averages say? Average rent 1995 was $650 and in 2014 it was $1250.  Source http://www.statista.com/statistics/200223/median-apartment-rent-in-the-us-since-1980/

 I am truly trying to figure out your reasoning, not bashing you. How many properties have you bought in the last 40 years that didn't double or triple in value. Are we just looking at best case scenarios?

Lets say a house does double in value in two years. Buy for 100k, 2 years its worth 200k. But you have 200 a month negative cash flow. That is $24,000 over 10 years. Then you have selling costs of 10 percent or so, that is another $20,000. You make $56,000 over 10 years or $5,600 a year. I make that with cash flow, plus I get the appreciation. 

And inflation increases Cash flow, because rents rise with inflation. it makes no sense that cash flow woud Be eroded by inflation. Capex woud make negative cash flow even worse whereas with cash flow you can absorb it.

 In less than two years?

Wow, counting on properties to double in value over two years as your investment strategy? 

Here are my three fundamentals i invest with:

1. Buy below market. I want properties 20 percent below value.

2.  Buy with cash flow. The banks love cash flow. Try to finacne more properties when you have negative cash flow and you will find out how sound the banks think your strategy is, as well as the big hedge fund lenders. 

3. Hope for appreciation. Appreciation is great, but there are no gaurantees in life. Sure you can claim cash flow is not guaranteed, but it is much more predictable than appreciation. You can also claim people dupe investors into false cash flow, but who's Fault is that? All numbers should be verified. 

The thing about appreciation is that it is never as awesome as it seems. There are selling costs or refinance costs. Plus taxes. Yes you can do a 1031, but it is not easy. I am dealing with all that now. Not a bad problem to have, but it makes it even better with cash flow.

the 70 Percent rule says you should pay 350k. I would also caution that you should know values yourself and not have to rely on an agent or anothet investor. That can also get you into trouble  

It took me 18 months to complete this flip. A mixture of bad management by me and horrible contractors. I got it done and I still made good money on it. Here is the article with before and after videos. https://investfourmore.com/2016/02/26/why-it-took-...

Congrats! Is this a different deal than the 10 unit property You posted about 7 months ago?https://www.biggerpockets.com/forums/432/topics/219478-my-10-unit-has-a-time-bomb-balloon-payment-and-i-need-to-move-it-ideas