t numbers and the highest numbers, and use the average of what is left. For this example, we have determined the average rental amount is $1,000.00 - $1,200.00 per month for a 4 bedroom home.

Let’s say we find a home listed for sale by owner that is valued at $95,000.00, but it is listed at $75,000. We contact them to view the property since the numbers look pretty good. After viewing the home and making some notes, we determine that it is a good home with no structural issues, but it does need a bit of a face-lift that will require about 5K.

After talking some more with the current homeowners, we determine that the

If your goal is to generate additional monthly cash flow, purchasing a property and renting it out is an excellent way to accomplish this. This is an investment that can either be done by choice to increase cash flow or by default if a property that was planned to be flipped doesn’t sell quickly enough.

Are you ready to be a landlord?

This is exactly the question that you want to look in the mirror and ask before taking on a rental. The basic concept of acquiring a rental home is that you purchase a property either by cash or most likely taking out a loan then finding a renter that will cover the cost of the mortgage payment or more.

To make sure that this scenario plays out how it is supposed to, it is important to check out the rental rates in the area of the property. Find out the different amounts that can be obtained for a three bedroom or a four bedroom. The reason this is so crucial is that you do not want to acquire a property that will require a mortgage payment that is higher then the local rental rates can support.

A good rule to follow is this, when you are looking to purchase a rental property, remember that a typical mortgage payment is going to cost approximately 1% of the loan amount.

Before getting started determining a goal cash flow per month is necessary as it will serve as the guide for a qualified property. For example, lets say that our goal is to increase our monthly cash flow by $250.00. To make this happen, we will need to either get a below market price on a property or find an area that supports high rental payments.

If you’re wondering why somebody would sell a home for below market value it is simple. For instance, perhaps a job transfer in which they need to sell quickly, or a death in the family and they need to move, a job loss so moving and cashing out on the equity in the home is necessary. There are so many reasons that I cannot list them all, but these types of properties are everywhere.

The next thing we need to do is find out the rental rates for the area. To do this, we call the city housing authority and find out what rental rates are for section eight housing. This will give us a base number to work with. Next, we call some local apartments and find out what rates they offer, this will give us another number to use. The last thing to do is call some realtors that specialize in relocations; they will be able to provide the most accurate information for rental rates. Once we have all these numbers, take out the lowest numbers and the highest numbers, and use the average of what is left. For this example, we have determined the average rental amount is $1,000.00 - $1,200.00 per month for a 4 bedroom home.

Let’s say we find a home listed for sale by owner that is valued at $95,000.00, but it is listed at $75,000. We contact them to view the property since the numbers look pretty good. After viewing the home and making some notes, we determine that it is a good home with no structural issues, but it does need a bit of a face-lift that will require about 5K.

After talking some more with the current homeowners, we determine that they

payment or more.

To make sure that this scenario plays out how it is supposed to, it is important to check out the rental rates in the area of the property. Find out the different amounts that can be obtained for a three bedroom or a four bedroom. The reason this is so crucial is that you do not want to acquire a property that will require a mortgage payment that is higher then the local rental rates can support.

A good rule to follow is this, when you are looking to purchase a rental property, remember that a typical mortgage payment is going to cost approximately 1% of the loan amount.

Before getting started determining a goal cash flow per month is necessary as it will serve as the guide for a qualified property. For example, lets say that our goal is to increase our monthly cash flow by $250.00. To make this happen, we will need to either get a below market price on a property or find an area that supports high rental payments.

If you’re wondering why somebody would sell a home for below market value it is simple. For instance, perhaps a job transfer in which they need to sell quickly, or a death in the family and they need to move, a job loss so moving and cashing out on the equity in the home is necessary. There are so many reasons that I cannot list them all, but these types of properties are everywhere.

The next thing we need to do is find out the rental rates for the area. To do this, we call the city housing authority and find out what rental rates are for section eight housing. This will give us a base number to work with. Next, we call some local apartments and find out what rates they offer, this will give us another number to use. The last thing to do is call some realtors that specialize in relocations; they will be able to provide the most accurate information for rental rates. Once we have all these numbers, take out the lowest numbers and the highest numbers, and use the average of what is left. For this example, we have determined the average rental amount is $1,000.00 - $1,200.00 per month for a 4 bedroom home.

Let’s say we find a home listed for sale by owner that is valued at $95,000.00, but it is listed at $75,000. We contact them to view the property since the numbers look pretty good. After viewing the home and making some notes, we determine that it is a good home with no structural issues, but it does need a bit of a face-lift that will require about 5K.

After talking some more with the current homeowners, we determine that the

determining a goal cash flow per month is necessary as it will serve as the guide for a qualified property. For example, lets say that our goal is to increase our monthly cash flow by $250.00. To make this happen, we will need to either get a below market price on a property or find an area that supports high rental payments.

If you’re wondering why somebody would sell a home for below market value it is simple. For instance, perhaps a job transfer in which they need to sell quickly, or a death in the family and they need to move, a job loss so moving and cashing out on the equity in the home is necessary. There are so many reasons that I cannot list them all, but these types of properties are everywhere.

The next thing we need to do is find out the rental rates for the area. To do this, we call the city housing authority and find out what rental rates are for section eight housing. This will give us a base number to work with. Next, we call some local apartments and find out what rates they offer, this will give us another number to use. The last thing to do is call some realtors that specialize in relocations; they will be able to provide the most accurate information for rental rates. Once we have all these numbers, take out the lowest numbers and the highest numbers, and use the average of what is left. For this example, we have determined the average rental amount is $1,000.00 - $1,200.00 per month for a 4 bedroom home.

Let’s say we find a home listed for sale by owner that is valued at $95,000.00, but it is listed at $75,000. We contact them to view the property since the numbers look pretty good. After viewing the home and making some notes, we determine that it is a good home with no structural issues, but it does need a bit of a face-lift that will require about 5K.

After talking some more with the current homeowners, we determine that the

ny reasons that I cannot list them all, but these types of properties are everywhere.

The next thing we need to do is find out the rental rates for the area. To do this, we call the city housing authority and find out what rental rates are for section eight housing. This will give us a base number to work with. Next, we call some local apartments and find out what rates they offer, this will give us another number to use. The last thing to do is call some realtors that specialize in relocations; they will be able to provide the most accurate information for rental rates. Once we have all these numbers, take out the lowest numbers and the highest numbers, and use the average of what is left. For this example, we have determined the average rental amount is $1,000.00 - $1,200.00 per month for a 4 bedroom home.

Let’s say we find a home listed for sale by owner that is valued at $95,000.00, but it is listed at $75,000. We contact them to view the property since the numbers look pretty good. After viewing the home and making some notes, we determine that it is a good home with no structural issues, but it does need a bit of a face-lift that will require about 5K.

After talking some more with the current homeowners, we determine that the

t numbers and the highest numbers, and use the average of what is left. For this example, we have determined the average rental amount is $1,000.00 - $1,200.00 per month for a 4 bedroom home.

Let’s say we find a home listed for sale by owner that is valued at $95,000.00, but it is listed at $75,000. We contact them to view the property since the numbers look pretty good. After viewing the home and making some notes, we determine that it is a good home with no structural issues, but it does need a bit of a face-lift that will require about 5K.

After talking some more with the current homeowners, we determine that they are going to be moving to a different city to be closer to their kids that have just had a new child. During this conversation, we also learn that they have lived in the home for almost 20 years and only owe about 35,000 on their current note. Throughout the conversation, the seller keeps using references of wanting to move quickly so that they can help out their daughter and new grandchild.

At this point, we can determine that the seller is very motivated and may be willing to take less then the asking price since they have so much equity in the home. It’s time to make an offer. During the offer process, we discuss the repair items with the seller and they say that they don’t really want to hassle with it. We gladly tell them that we will be more then happy to handle the needed repairs, we will just take them off of the list price. We make an offer for $65,000. That will give us value in the property even after the repairs are complete.

After taking a few minutes to discuss the offer, the seller accepts and we move forward. The seller gets what they want, which is to sell and move closer to their family while still making $30,000 in equity, and we get the home we want with about $40,000 in equity still in it.

Let’s take a closer look inside the numbers to see if we met our goal.

Our Goal: Cash Flow of $250.00 per month

Sale Price of Home: $65,000

Repairs Needed: $5,000

Total Loan Amount: $70,000

Mortgage Payment: $700.00 (1% of Total Loan Amount)

Rental Amount: $1,000.00 Per month

Cash Flow: $300.00 Per Month

It looks like we have actually exceeded our goal by $50.00 per month for this example.

Scenarios like this exist and happen all the time. As long as all the correct research is done in the beginning, and you stick to your goal cash flow number, finding the property will not be that difficult. It may involve calling several different sellers and looking through a few homes to find the match that fits your goal, but rest assured they are out there.