Negative cash flow

**Invest_Pre_Construction** · 08-31-2007, 07:43 AM

Simply put, negative cash flow is when the amount it cost to hold a property exceeds the profit generated by that property. Positive cash flow, however, is when a property generates a monthly profit for the owner of the property.

Negative cash flow inspires passionate debate among real estate investors. Some investors avoid negative cash flow at all cost because it eats up profit. Others, however, don

**Rich_in_CT** · 08-31-2007, 08:03 AM

If you are buying for appreciation in this market and dealing with negative cash flow you're probably going to be holding for a while....you better have some serious funds stocked up to keep paying those bills for the next 5+ years. Why overpay for properties and have to deal with negative cashflow? If you buy right you can have positive cashflow now and since you bought cheap you will have greater appreciation profit when the market turns around. To buy cheap you are going to need to do a little bit of rehab but the rewards are great.

**TJ2007** · 09-03-2007, 11:28 AM

It's the classic golden rule of 'make your money when you buy,not when you sell'.

lock in your profit when you buy or you are just gambling.

Did 1000s of investors make huge appreciation on gambling on properties wiht neg cash flow over the last 5yrs? YES. So have I, but most are now in big trouble.

besides there are so many deals available now with guaranteed rental income it is silly to go negative. Certainly dont recomend banking on appreciation on any properties in the US for a LOOOng time....

**wikkideclipse** · 09-04-2007, 11:03 AM

Originally Posted by TJ2007

It's the classic golden rule of 'make your money when you buy,not when you sell'.

lock in your profit when you buy or you are just gambling.

Did 1000s of investors make huge appreciation on gambling on properties wiht neg cash flow over the last 5yrs? YES. So have I, but most are now in big trouble.

besides there are so many deals available now with guaranteed rental income it is silly to go negative. Certainly dont recomend banking on appreciation on any properties in the US for a LOOOng time....

not to drag out the cruddy stock market.
Whatever happened to buying low and selling high?

**Rich_in_CT** · 09-04-2007, 11:23 AM

Originally Posted by wikkideclipse

not to drag out the cruddy stock market.
Whatever happened to buying low and selling high?

It's still there, you just need to make sure the cashflow is positive between when you buy and when you sell so you don't tank your profit and get in trouble by having to come out of pocket every month. If you are negative for longer than expected you run the risk of losing the house to foreclosure, losing your investment money that's in it, and ruining your credit.

**jbcollins** · 09-13-2007, 09:29 PM

If you're not making a profit in your second year.. Check the market, and unload it for a profit... Or, try Section 8 renters.. You can get more money if they have kids (hopefully one boy and one girl). More money because they need to be in separate rooms...

**cream4jay** · 09-30-2007, 08:01 PM

I have 1 property that I am losing over 2K on per month in Tampa. All of my other properties make excellent cash flow. I can't hold out much longer paying for the property, but it has sat on the market for over a year. I have it priced at what I owe, but not even 1 showing. I was thinking about letting the property foreclose if I can't sell it. Any suggestions?

**jbcollins** · 10-01-2007, 07:36 PM

Whatever you do, don't foreclose. Rent it out for a lower price. Hold off for as long as you can, because the market is going to turn around. Also, before you rent it, check out the website 'donotrentto'. It's a good site, and it may save you some headaches..

**cream4jay** · 10-03-2007, 06:11 PM

I will definately check out the site. I thought about it, and I think I am going to sell one of my rentals and take the profit and pay off half of the anchor home. This way I will start breaking even, or possibly making a small profit on the house. Thanks again.

**REbuyersgroup** · 10-04-2007, 05:34 PM

Dump the non performing property. Do a Deed in Lieu of Foreclosure. I had a friend do it with 2 properties and it never hit his credit. He is just happy to be out from under the debt load.

Call the bank and ask questions. Can't hurt.