BiggerPockets Daily Is Cash Flow Dead?
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Feb 21, 2025 Explore the challenges of achieving positive cash flow in today's real estate climate marked by high interest rates and soaring home prices. Delve into the struggles of the BRRRR method and understand why it's vital to rethink cash flow for long-term wealth. Discover how 1031 exchanges can help defer capital gains taxes and enhance buying power. Gain insights into common cash flow pitfalls and learn modern strategies like house hacking and flipping that can lead to better wealth building.
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Cash Flow's Allure vs. Long-Term Gains
- Cash flow is often touted as the holy grail of real estate investing, promising monthly income.
- However, some investors prioritize cash flow and overlook deals with better long-term potential.
Reassessing Cash Flow Fixation
- Many investors fixate on cash flow and miss potentially lucrative deals.
- This fixation requires reassessment, especially given market changes impacting cash flow.
BRRRR's Challenges in Current Market
- David Greene, author of a BRRRR book, admits it's harder to rely on cash flow now.
- A Kansas City property example demonstrates this, where seemingly positive cash flow turns negative after expenses.