Cash flow is also profit, but tangible profit....and, it the property didn't recover, which profile would you rather be in:A)  Financed with only 20% down (own money), and only have to recover the down payment to break even (since the tenant(s) are paying the mortgage for you)B)  All 100 % cash/equity, and have to recover ALL of your "purchased" equity before you start making a profit.

I'll expand my activities in this space if I have a profitable experience over the next couple of years.

So that becomes part of your realized profit.

So I have been doing some serious debating for a while now on whether to sell one of my very good cash flowing 4 bedroom 4 bathroom single family rentals in the hot, in my opinion overpriced, Madison, Wi area for a large profit and reinvest the profit into a larger property or to hold onto it and keep the cash flow coming in.

Take away buying costs of 5pct plus title insurance etc (about 6-7k)Take away holding costs of 3kTake away selling costs of 11kTake away minimum profit of 15kMax offer 93kProperty is in a great neighborhood and LOOKS like its a paint/carpet rehab from the pics However, roof is 20 years old, ac condenser is 20 years old.  

Personally, I found @Joshua Andrews' book Paper Profits to be a really good introduction.

My Broker being the mad man he is, used my deal to bully the seller into giving my friends a good deal, so now we own the better part of a block.Right now I'm sitting on my property until the urban renewal project on my end of town brings up the property values a bit and hopefully I'll make a good profit and maybe find an investor interested in a a couple of duplexes when I go to make my next move. 

Now the house sits for three months and now Im covering the mortgage (at 143,000 for a VA mortgage your propably sitting $800 with taxes) which equates to $2400 leaving me with zero profit.

As with businesses, don't expect to profit right off the bat.

I work full time at a non-profit for at-risk inner city teens.