Welcome to the Bigger Pog and Money Pog Cash Show, number 322, Finance Friday edition,

where we interview Pam and talk about taking a deep look at the true cash flow scenario of your rental portfolio.

My husband and I, we talk a lot about, well, do we want to do the cash out or do we want to keep them paid off for increased cash flow?

We do have four properties paid off right now. We were toying with the idea of refinancing two or three of them to help pay off the private lender.

Hello, hello, hello, my name is Mindy Jensen and with me, as always, is my sunshine on a cloudy day co-host, Scott Trudge.

That's me beaming Mindy.

Scott and I are here to make financial independence less scary, less just for somebody else.

We want to introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you're starting.

That's right, whether you want to retire early and travel the world, go on to make big time investments in assets like real estate, start your own business, or analyze your portfolio and consider selling some of that real estate.

We'll help you reach your financial goals and get money out of the way so you can launch yourself towards those dreams.

Scott, today we are talking to Pam and she has a very interesting set of circumstances with regards to her investment portfolio.

She has been investing over the last three years, gathering, collecting real estate properties and now it's time to analyze those and see if they are worth holding on to.

Pam has a very, I would imagine a very common situation for investors who have been using variations of the Burr methodology where they've got build up a lot of equity, but it's a little hard to cash flow in some situations and maybe some of the properties don't cash flow because we haven't been doing enough of a rigorous analysis on that cash flow and really accounting for things that are phantom expenses that don't show up every month but you have to plan for vacancy, like maintenance, like CAPEX.

We run those numbers all the way through on every property in your existing portfolio and any property you're considering buying and make sure that your cash flow positive.

You don't have to get a 10 or 20% cash on cash return, but you have to be positive in order to sustain it in this business, according with conservative assumptions over the long term. In my opinion.

Yes, and you said the V words got vacancy. We didn't even talk about vacancy on this episode because she has really great properties that don't have any vacancy. She said that she's got people that have been there for since 2015, but that is something that we forgot to talk about.

Vacancy should be estimated at 8%, a lot of people will say 5%, it should be estimated at 8% because 12 divided by 1 is, or 1 divided by 12 is 8. I don't know, a whole month's vacancy is 8%.

Hey, if you estimate high and then you come in a little bit lower, you win. If you estimate low, then you lose.

What do you do if you can't get the numbers to work on a cash flow basis with conservative assumptions, you use less leverage or you wait or you pick your different market or different strategy with that.

You don't have to make again 10, 15, 20% cash flow each month to get into this game. There are appreciation and amortization benefits, but you can't cash flow negative because it'll just suck money out of your life and make things miserable in the hand flow downturns. We are going to experience over the next 50 years.

Okay, before we get to the show, let's hear a word from today's show sponsors. You just said the G word Scott, you said this game to get into this game real estate investing is not a game.

It is a business and if you treat it as a game, you will lose every single time.

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