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BiggerPockets Real Estate Podcast

853: How to Make a 120% Return by Buying “Negative” Cash Flow Real Estate

BiggerPockets Real Estate Podcast

BiggerPockets

Education, Business, Investing

4.816.5K Ratings

🗓️ 6 December 2023

⏱️ 40 minutes

🧾️ Download transcript

Summary

“Negative” cash flow can help you reach financial freedom up to FIVE TIMES faster, so why are most investors ignoring low-to-no cash flow deals? For decades, cash flow has been king in the real estate investing realm. Investors were told NEVER to buy a rental property that didn’t bring in hundreds a month or at least break even. But now, this golden rule of real estate investing is broken, and there’s a FAR faster way to build wealth that sacrifices cash flow for something much more powerful. And this isn’t just some hypothesis or “what if” scenario. We have three investors today showcasing three real estate deals, ALL with negative cash flow and ALL with huge equity upside, 100% (or greater) returns, or profits that far outweigh what most investors even dream of achieving on their real estate deals. And if you do just a few of these deals the right way, you could reach financial freedom in a matter of years, not decades, like today’s guests. Join David Greene, James Dainard, and Mindy Jensen as they do their best to deprogram the masses from “cash-flow-only” investing and show you why negative cash flow isn’t always bad—in fact, it could be a sign of an unbelievable deal. In This Episode We Cover What is “negative” cash flow, and why TOP investors go for these deals ROE (return on equity): the one metric the ultra-successful pay attention to How James traded $800 a month for over $300,000 in equity (with ONE property) The danger of floating rate debt and how it can easily KILL your deals David’s $100 negative cash flow deal that INSTANTLY made him $90K The negative cash flow rules that you MUST follow And So Much More! Click here to listen to the full episode: https://www.biggerpockets.com/blog/real-estate-852 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0

Welcome to the BiggerPockets Podcast Show, 853.

0:04.0

I was taking into the forums and found an abundance of posts, as in hundreds of posts dating

0:09.2

as far back as 2008 surrounding the topic of negative cash flow.

0:14.4

As in when is it okay to lose money on an investment property?

0:18.1

So today we're going to unpack negative cash flow.

0:20.6

I invited some great investors on the show today so that we can discuss some real examples

0:23.9

and share why investors may choose this investment strategy.

0:27.0

After this episode we hope you will understand who this is for and when to stay away,

0:31.0

as well as some of the rules one of our panelists used to vet

0:33.6

negative cash flow deals. I'm joined today by Mindy Jensen of the BP Money

0:37.5

Podcast hello Mindy. Hi Rob, thanks for having me I'm super excited to talk to you

0:41.5

today. Happy to have you.

0:42.7

We're also joined here by former Red Robin Waiter of the year

0:46.0

turned on the market podcast panelist James Dainard.

0:49.7

Hello, my friend.

0:51.0

How you're doing, bud?

0:52.0

I hope you're ready for this, because we're gonna get it, we think we're going to get into it in today's episode.

0:55.3

Well, if we don't perform, I'm going to have to go back to Red Robin and start singing birthday songs again.

1:00.1

So we'll try to avoid that.

1:01.6

And we're also joined here by the beard, formerly known as David Green.

1:05.7

Hello, Dave.

1:06.4

Good evening, everyone.

...

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