money-mdQ. What is Cash Flow?

A. Cash Flow is the total profit from an investment after all expenses are paid.


Q. What is Cash Flow Rental Property?

A. Cash Flow Rental Property is property that provides income equal to or greater than what the stock market can provide. For example, if you invested $100,000 in a mutual fund with an average annual performance of 12%, your money would increase an average of $12,000 per year.

Now imagine purchasing a home for $100,000 that rents for $1,000 per month. That home will provide $12,000 per year of income every month. Such an investment would be equal to or better than investing in the stock market, because rental prices go up, which means the monthly cash flow will increase as well. Here is an example:

11954444431532970476Gerald_G_House_sitting_on_a_pile_of_money.svg.medPurchase Price: $50,000

Annual Real Estate Tax: $500

Annual Home Owners Insurance: $300

Annual Property Management Costs: $900

Total Income per month: $750

Average Total Expense per month: $142

Total Monthly Cash Flow: $608


Q. Can I use my IRA to purchase Rental Real Estate?

A. YES! By creating a self-directed IRA, you can take the $50k in your IRA and purchase real estate. The rent collected will go back into your IRA, increasing its value. When you have enough, you can purchase a second home, third, etc, and your IRA can outperform mutual funds.

Q. Is my investment guaranteed?

A. As with all investments, there is some risk. There are ways to reduce exposure to those risks, such as purchasing home owner’s insurance, and using a professional management company. These do have costs associated with them, and it is our goal to provide properties that produce a total cash flow of at least $100/month for every $10,000 invested.