All Forum Posts by: Joe Ward

I'm sorry, I misunderstood. Cash-flow is a primary concern but property appreciation matters as well, so I'm trying to evaluate for both.  In my position I don't want to enter a property that doesn't cashflow in hopes that the market stays hot here....there is too much flux in the world for that imho...but cashflow alone is only part of the equation.

Ultimately, this question was asked because I was using the calculators for the first time and doing my best to learn and expand my knowledge...and I wanted a little clarity around what I saw that didn't pass the sniff test. Turns out that I was mistakenly using a low estimate for vacancy rate, capex, and repairs and that skewed the numbers.

@Joe Villeneuve

Long term goals are simple, excellent and diverse positive cash flow and assets to fund a somewhat early retirement. My strategy is also fairly simple, following the 7 year model, starting with small multi rentals that build to larger properties with more doors over time. Ultimately I see also owning some short term vacation rentals in key locations in addition to the relatively more stable long term small and large multi family rentals, perhaps some well positioned luxury apartments.

I have a decent position now with an excellent 6fig income from my job, and I love what I do...but I don't want to do it forever :-)

Thanks for the reply @Tim Herman - I  did include 10% for PM, and 5% for everything else - that probably accounts for the delta.. My local area is high demand low supply so I may not be able to do better than a 'base hit' here.

- just taking some time to sharpen the axe :)

I'm just starting out with market analysis and property analysis for small multi as a first cashflow investment vehicle. My question is how to apply the 50% rule and cashflow rule properly for analysis.

For example, applying the 50% rule on a property that I'm looking at, the cashflow comes in at around $150/unit , a base hit - short of the $200/unit home run.

However the CoC is a whopping 20% and the gross rents are around $300 / unit ... which according to the multi webinar I just watched are both in grand slam territory. Am I misunderstanding the 50% rule and the application of the $200/unit cashflow rules of thumb?