Cash Flow

Residual Income for Life!

Cash Flow is by far the performance objective most investors seek. It is the holy grail of investing.

What is Cash Flow (CF)? Basically, if you take the income you receive from a home (the rent) and subtract all of your expenses (mortgage, taxes, insurance, utilities, repairs, vacancies, etc.), this is what the amount remaining is called.

Positive CF is what makes an investment profitable. The reverse situation, of course, would be your expenses are more than your income and therefore you have negative CF, which is not what most investors seek.

In some areas of the country, it is almost impossible to find homes that are profitable on a monthly basis, like California for instance. If the prices of homes in an area have gone up so much so that mortgages cost more than rents, then that area would not be somewhere you would want to invest in if cash flow was your primary performance objective.

Not to say you would never invest in an area where mortgages are more than rents - you may need some tax deductions and possibly want to show a loss on your tax return. Or you may have an appreciation objective instead. But for the most part, the majority of investors prefer to get a little mailbox money every month.

As your real estate investment portfolio grows, if you are finding areas where home prices are still low enough that rents are more than your mortgage and expenses, you will find over time that the positive CF you receive each month can eventually be enough for you to live on, and that is a very happy day, because you can then say good bye to your W-2 job (if you still have one)!

This type of investing, where money comes in even while you sleep or travel, is called Passive or Residual Income. It should be the goal of every person to accumulate enough of it so you will eventually have financial freedom.

Most people can barely get their Income over their expenses. Could you imagine a day when you would have your Passive Income over your Expenses? Talk about being able to dream big!

Until the day when you do, a wise investor will keep saving their monthly profit and reinvesting it until one day they can safely run their life on auto pilot.

In my Research area of this website, I'll teach you how to identify areas that can still be profitable and how to maximize your profits with very simple techniques.

There's a lot of money to be made in real estate, and this one strategy is the most reliable and efficient way to do it that I know of!

If you'd like to invest in Cash Flowing Properties, but don't know how, see my Partners' section for more information.