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949: Seeing Greene: Is Losing $800/Month in Cash Flow Worth $200K+ Equity? - Publication Date |
- May 07, 2024
- Episode Duration |
- 00:46:43
Would you buy a rental property that loses money every month? What if, in a few years, that one property could make you hundreds of thousands of dollars? Would the negative cash flow be worth the massive appreciation upside? Today, we’re answering that exact question from an investor who could be sitting on a wealth-building opportunity but doesn’t know what decision to make. Should he buy the "bleeding" property at a steep discount or give up this needle in the housing market haystack to avoid a cash flow trap? Let’s find out!
We’re back on Seeing Greene as David and Rob, your go-to real estate investing experts, answer questions directly from BiggerPockets Real Estate listeners like you! First, an investor has a rare opportunity to buy “Grandma’s house” with over $200K+ in potential equity upside. The problem? It will LOSE $800/month! Next, a new property manager wants to know how to raise rents on a twenty-year tenant. Do you pay capital gains on the profit of your home sale or the entire amount? We’ll show you how to know how much you owe. Then, an investor debates selling his C-class cash-flowing properties in exchange for appreciating assets, and we explain the “sneaky rental” tactic that’ll take you to ten rental properties in no time!
Want to ask David a question? If so, submit your question here so David can answer it on the next episode of Seeing Greene. Hop on the BiggerPockets forums and ask other investors their take, or follow David on Instagram to see when he’s going live so you can jump on a live Q&A and get your question answered on the spot!
In This Episode We Cover
Negative cash flow and one of the ONLY times it makes sense to buy a “bleeding” rental
How to raise rents (the right way) on a long-term tenant
Capital gains tax explained and how much YOU could owe on your next home sale
Whether to trade cash flow for appreciation and selling your rentals that don’t have room to grow
The “sneaky” rental tactic that allows you to scale a real estate portfolio FAST
And So Much More!
(00:00) Intro
(01:23) Losing $800/Month to Make $200K?
(11:59) Raising Rents On 20-Year Tenant
(21:28) Comment Section & Capital Gains 101
(25:47) Trade Cash Flow Portfolio for Appreciation?
(33:05) The "Sneaky Rental" Tactic
(38:20) Ask Us Your Question!
Check out more resources from this show on
BiggerPockets.com and
https://www.biggerpockets.com/blog/real-estate-949
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