Posted by Bill K. (AZ) on May 23, 1999 at 13:05:49:
I won’t talk to the cap rate issue, but on the cash flow side of things, your “ex-lender” is wrong. Cash flow is cash flow whether it is generated from single-family, multi-family, or commercial properties.
I have several friends who are making $100-$300/month positive cash flow on their single-family home holdings. Now, if you were to own 20 single-family homes generating, on average, $200/mo cash flow, you’d be making $4,000/month. If I wasn’t already “laid off”, I could comfortably quit my job with that kind of monthly income. Of course, I wouldn’t stop there, but I wouldn’t have to work for an “employer” again.
Look to the numbers. They will tell the story of what can/cannot be done in any deal.
Bill K. (AZ)