Anthony Rullo Look at it this way, a water heater replacement will cost you $600 in materials. now on a 120k property that’s 5%, on a 300k property that’s 2%, on a 600k property that’s 1%. Same theory goes to rent. So negative cash flow on an LA property if you put the same percentages will be worse than if you put actual figures, maybe 10% on maintenance on other states will only be 4-5% of CA. And, you should put 0% down to guage if it REALLY cash flows. I could declare that all properties in any location will cash flow if I put 100% down. Now when talking about money out and money in, say putting 20% of a 600k property is 120k, and say i break even each month and gain appreciation, vs 20% of 5 properties worth 100k which and i get say 100 each in cash flow, so that’s 500/mo for my 120k and no appreciation, i’d rather go with appreciation than the 500. On the 500, if something breaks down like one of the roofs, my 1 year profit (say 6k roof replacement cost), and gain nothing. On the appreciation side, i get nothing a month and maybe only 100k in appreciation in say 3-5 years. I’d rather take that than fly/drive out to fix an issue. A true investor will count their time going there, the cost of hotel/plane ticket, their efforts, and all associated expenses, time is always money.
