[quote user=Bindy25]budget is $200k. My focus will be cash flow!
200,000 cash ? or total property value ?
If levered 3:1 or 4:1 there is no cash-flow. Cash-flow might exist in smaller towns, with higher risk of vacancies, though, or property value decline. You can also create true cash-flow if you put down 35% or more in bigger centers !
Also assume cash "flow" makes only a brief stopover in your bank account
before it is used, 2 or 4 years from now for repairing the carpet, a
paint job, the broken fence, 2-3 months vacancy, a new fridge .. or
worse: a new roof, new hot water tank and a new porch.
As such have a decent reserve. "decent" is a function of property age,
vacancy assumption, mortgage payment and ability to absorb risk or write
cheque for 5 digits in an emergency like a leaky roof or a really bad
tenant that trashes not only the carpet but also the kitchen or the
drywall. Aim for a minimum of 3 month property cost (taxes + utilities +
mortgage + insurance) .. better 6. I'd say $20,000 comes in handy once
in a while, and if not in cash, at least in an LOC that can be drawn
upon when needed.