Follow Up Question About How Much To Put Down On Each Deal
I understand that if I am able to do the deal with 0% down, or even 5 % down, and the property cash flows, than the deal is good. Being new at this, I have a few additional questions (by the way, the only properties that I am looking at are 3 family houses): 1: How much positive cashflow each month would be considered enough to do the deal? 2: Is it a dollar amount based on the cost of the property, or a percentage? 3: Do you also cut off 10%-20% of the monthly revenues to account for repairs and vacancy?
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There is no rule as far as how much positive cash flow you have to have. Obviously the more the merrier.
I prefer to look at everything in a percentage factor as it keeps it real, versus counting my profits before they are gotten.
Vacancy rates change from area to area, but in my areas it ranges from 5-10%, unless it is a vacation property where the vacancy rate goes to 30-40% but the rental amount doubles.
Good Luck,
Kyle