Delayed Cash Flow?

[rxv421]

Hello All,

Hoping I can get some thoughts on my situation. Sometimes I just get nervous as to whether I am doing the right thing. I do not need any additional cash flow from real estate at this time but would like have have some in 10-15 years during/around retirement. In 2005, I began to buy a few properties and have accumilated 10 since, with all on 15 year terms. Some make a little, some are near even, and a few are negative. The latter are generally due to the fact that I did not put much down and therefore the note payment is greater than others. ALL will have positive cash flow when their respective mortgage is payed off...So the entire 10 costs me each year but it is no strain on my financial situation to do so...I hope to aquire 10 more properties over the next several years and will likely buy them outright with the immediate positive cash from those helping the deficit...Is this a good strategy or am I making a big mistake?

thanks in advance,
RXV

[sam@bcre.com]

If you can financially swing it then I would continue to do so. Sounds like you are investing in the right properties and there are many real estate markets where you can buy homes under $100,000 and make them cash flow. What city are you investing in?

[rxv421]

Yes, we are in a smaller university town in southeastern US. Lots of professionals that come in for 2-4 years at a time and also several professional graduate schools that attract a good stream of quality renters. All my units are either condos or townhomes priced between 70k and 93k. My plan is to purchase a few outright in the next couple of years to lessen the losses and maybe give me a small positive cash flow. I do not need any cash from the units at this time but would like it to kick in in about 10 years or so...

thanks,
RXV

[www.eric3.com]

Same here, the homes in Tampa are turning cash flow positive at todays prices as well. It's amazing how our supply and demand here are virtually the same as 2006 yet the prices are half as much.

[rxv421]

Not all mine are purely positive at this time and that is my concern and reason for my original post. It is because on some I put down more and hardly anything on others. Overall, I am trying to break even or show minor loss total over the 15 years but will need to add a few units(no mortgage) to the mix that produce instant cash flow to do that as the losses are a bit more than I would like although not a financial stain. However, when the other mortgage gets paid off, they will all become positive. Would love to hear some comments...

[OlenRay]

Same here, the homes in Tampa are turning cash flow positive at todays prices as well. It's amazing how our supply and demand here are virtually the same as 2006 yet the prices are half as much.

Eric, you should see what's happening in California. Right now, the price levels are flat, but inventories are anywhere from 15-55% lower than they were last year. I just saw an impressive infographic on the state of affairs out in California. It was on Movoto Real Estate's site. It's odd: Sellers are 'missing in action' and investor cash is flowing like crazy. And no one likes what's on the market.

To me, it's great news. I'm looking to take my time to buy my first house. What do you guys see in your states?