$14K profit rent or sell?

Am a newbie. My goal is to buy 3 rental properties per year. I have 2 rentals already. But with the way things are going i might have to do some flipping. I have a property (2bd 1 bath) that i bought for 40k and it cost me 3K on repairs. I can get at least 57K for it. I got an home equity loan of 15k ,8.89% apr i used for down payement and repairs. I don’t want to use my own money but i needed to do this to get started. Do i sell the house and pay of the loan or do sell the house and use the money as a down payement for two other properties? From Oklahoma.


Oklahoma is OK.

Let’s get everything into perspective.

Why do you think that you need to do some flipping? Are the rentals not working?

You say that you had to use your “own” money to start, but if you got a home equity loan, then that was the bank’s money, not yours. Sounds like so far, you’ve done 0 down deals. Not really an issue here, just wanted to clarify.

You say that you can get at least $57K for the property. Is that it’s estimated value, or just a guess?

What is the rent for this property?


Rentals are working just fine. It’s just that i have reached my goal of 3 properties per year sooner than i thought and also that i have come across afew deals that i could have flipped. The house has been appraised for $60k and rent is $550 minimum. The mortgage on it is $378/month. I didn’t know that’s what is meant by zero down. I thought that that’s my money because that’s what i would get if i sold me house. Can you please clarify that for me.



Amos, I would suggest that you don’t set goals that put a limit on you. If you have the opportunity to go beyond that goal, do it. Raise the bar, shoot higher. Your goals shouold be more general and your plan for what to do with your properties more specific. You could buy down your loans on the existing properties with the money from the flips and increase your equity and cashflow or you could buy more properties with the money and still increase your cashflow and equity position, just spread over more properties. Looks to me that your plan is to own properties. But I wouldn’t stop at keeping three a year, the idea is independence. Don’t limit yourself. The more cashflowing properties you have, the sooner that independence comes.


I agree. It is good to set goals, but remember that you goal is just the minimum. If you reach your goal, GREAT!, but do not stop, shoot for the sky! It would be a good idea to flip a few to build a good cash reserve, other than that I would hold them. Flipping will bring quick cash, but holding will build wealth, I’ve heard that more than once.

Good luck, Weldon

No Money Down simply means no money out of your own pocket (or checking or savings account). If you used an equity line, or an 80/20 loan, or bank loan plus owner financing, or any other combo where you didn’t have to come up with actual cash from you, then you did a no money down deal. Congrats. You’re doing better than most and didn’t even know it.

As to goal setting. I think that you’re doing just fine with your goals. Goals need to be VERY SPECIFIC. No only the goal, but the way to obtain that goal. Congrats again. You’ve accomplished your goal. Now, it is time to either reap the rewards of that goal or to set a new goal (maybe 3 more rentals this year). If holding is your plan, then stick with it. Many investors fail because they don’t stick with their original plans and then start to flip/flop all over the place.

The more, the better isn’t always the case, either. That’s why a goal is very important. Since you’ve reached your goal, now you reflect on that achievement and decide if that goal is working, or you want to set a new goal. If you were to buy 3 more this year, could you keep up with the rentals and your fulltime job? If you set a new goal, will you push yourself to just find a property (thus, becoming a motivated buyer) or work harder to find better deals, thus increasing both cashflow and equity position?

Finally, as a buy and hold, you need to make sure that your rentals are actually making money. With goals, now you can focus on if your current rentals are actually cashflowing or not, and if not, what you can do to fix that problem before you buy the next.


I currently have a positive cash flow of $150 from each property. My goal is $200. I didn’t use any formular to get to that amount. I just thought that was a safe amount. How does one determine what is a good positive cash flow? Thanks again everyone for your advice and encouragement.


If you didn’t use any formula, my concern would be are you actually making $150/month positive cashflow? For instance, if you’re just subtracting your monthly payment from your monthly rent, then you’re forgetting about some things. Is taxes and insurance figured in? Is vacancy and maintenance figured? Property management fee (yes, you may be doing it yourself now, but don’t you want to get paid for being a property manager? More important, don’t you want to be able to pay a property manager when the time comes? Is your payment to your equity line figured?

If all of that is figured and you’re still making $100-200/month, then you’re doing damn good. Continue on. However, if these haven’t been considered and you’re not making what you thought, then you may want to reconsider how you are buying your properties and look for better deals.


I had all that figured in expect vacancy and paying myself. I will adjust my numbers. Thanks again Raj.