It doesn't look like it would add much monthly cash flow, but you pick up the equity and appreciation.

Hi BiggerPockets Community,I’m looking for advice on breaking even or generating positive cash flow with my studio condo in Prospect Heights, NYC.

Be positive -  I would guess that over 95% of our clients complete their exchanges with properties they like.  

@Pranav PatelStarting your real estate journey with $50K saved and a strong income ahead is a fantastic position to be in.

I have worked really hard over the past decade to position myself to begin to build my portfolio. 

They maynot want to do this if they are using a Bank to finance, since thebank will want “First” lien position and you won’t want to do“Second” position.

Seller will be taking a 30k+ loss with this route.325k with 50K down to seller, 3 years of payments $1600/month, and a balloon payment of 215k at the end of 3 years.Benefits to me: (1) 10k less downpayment, (2) with the conventional route, the loan would be at 228k after 3 years of payments, so I will gain additional equity with the 2nd option since I will owe 215k (presumably I will have to refinance at that time).Benefit to seller: she gets over asking price, 50K upfront and $300/month of cash flow.Does this offer and structure sound reasonable?

that we’ve learned in our 24 years, managing almost 700 doors across the Metro Detroit area, including almost 100 S8 leases:Class A Properties:Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.Vacancy Est: Historically 10%, 5% the more recent norm.Tenant Pool: Majority will have FICO scores of 680+ (roughly 5% probability of default), zero evictions in last 7 years.Class B Properties:Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.Tenant Pool: Majority will have FICO scores of 620-680 (around 10% probability of default), some blemishes, but should have no evictions in last 5 yearsClass C Properties:Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation.

And, for those people who have more time than money, they can put in sweat equity into directly owned real estate.

I happen to know that Preston Despenas, one of the partners of Growth Equity Group, is still doing real estate in Texas.