Each strategy and type of property is unique and different. This could mean more cash flow or less. There are so many variables that it would be impossible to tell you an average amount you could expect on a particular property. The best thing for you to do is discuss the type of cash flow that other investors are getting using what type of strategy in your area and use that as a guideline.
Use this Property_Analyzer to experiement with the properties that you see in your area. What properties cash flow off the MLS? Where can you find rent numbers? Estimate the numbers if you need to.
You should now have an idea of the approximate number of properties that you need in order to achieve your lifestyle goals.
You will need to now figure out what your next few financing moves are going to be, when it comes to your goals, how much funds you will need to achieve the goals, and what type of properties you are going to buy.
EXAMPLE: Let’s say you need to purchase 3 more duplexes by yourself in order to achieve your goals of $2400 per month. Each duplex requires a downpayment of $70,000. You only have $105,000 in a secure line of credit, that you can use for purchases.
Coming up with options:
1) You will need to do 3 buy-fix-refinance-rent properties where you create your own legal basement suites, and leave 50% of money in each project.
2) Purchase one property yourself and look at purchasing 4 more through JV Partner Money with 50% cash flow, giving you $2400 per month
3) Use short term mortgages, and use the value lift of the property to access new equity each year with a refinance. Own a 300,000 property – 5% appreciation per year in two 2 years value is $330,750 = Access $24,600 (80% of $30,750) with a refinance at the end of year 2.
4) Keep going.
Know the financing that you will need based on the options that you outline above. Talk to a Mortgage Broker who understands investment mortgages for help. You will need to figure out who will qualify for these mortgages and where will the down payment come from.
Qualifying for the Mortgage:
Remember the TDS and GDS calulations, keep these in mind as you continue to build your portfolio. As this will effect your ability to get financing on your next purchase.