Real Estate Investing with Coach Carson #436: How Much Cash Flow Should Your Rental Properties REALLY Be Making?
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Aug 15, 2025 Discover how to accurately measure cash flow from rental properties using effective formulas. Learn about the crucial roles of location and financing in your investment decisions. Uncover strategies to enhance cash flow and set realistic goals. Emphasizing patience, the podcast compares real estate investing to nurturing a fruit tree, highlighting that returns take time. Listeners will gain practical insights and resources for thorough property analysis.
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NOI Is The Core Metric
- Net operating income (NOI) equals rent minus all operating expenses excluding mortgage.
- NOI is the foundation for comparing properties across markets and calculating yields.
Two Returns: Yield And Cash-On-Cash
- Unleveraged yield equals NOI divided by total purchase cost and is like a cap rate.
- Cash-on-cash return equals cash flow after financing divided by cash invested when you use a mortgage.
$250K Example: Low Cash-On-Cash
- Example: $250,000 purchase, $2,000 rent, $800 expenses gives $14,400 NOI annually.
- With 30% down and 6.45% financing that example produced only $100/month cash flow and 1.6% cash-on-cash.