Cash flow is such a broad and generic term, but Cash Flow Real Estate gives us focus enough to discuss some very powerful information! There are hundreds of definitions of “cashflow” out there. Most are very specific to the field in which the term is used.

When assessing if a business is on stable ground, for example, the cash flow will help determine if the entity is solvent or not. Or when looking at personal finances we always want to know where our money is coming from and how it is performing.

Whether it be cash which is flowing out of your account or cash flowing into your account. Some would include all your income while others would separate it out by gross, net, and operating after expenses etc…

The combinations of factors that could make up the term is inexhaustible.

The takeaway here is that you need to first decide on what you are assessing. Then you know by which definition you can make your assessments. Make sense? Good.

Let’s focus on real estate and what “cash flow real estate” means.

It comes in many different forms. Though all forms are different the end goal is the same.

Income generated from an asset that is greater than the total expense to operate or hold that asset is considered cash flow or better yet positive cash flow.

It’s vitally important to note that EVERY asset has cash flow. The difference is if it is positive or negative. Every investor is after positive cash flow when it comes to income generating assets. You see, every asset has associated expenses.

With real estate these expenses could include paying a property management company, a plumber, an appraiser, and of course the mortgage and insurance every month.

The goal of acquiring the property in the first place, if you are looking for the good kind of cash flow, should have been to rent the property and receive a rent check that is more than your monthly expenses.

It typically doesn’t matter what strategy you choose to employ, whether that be fix-and-flip, buy-and-hold, developments etc. there will always be a cash flow statement. The trick is to have it be more than the expenses. Simple enough.

For some real life examples from my own portfolio check out Lease Option in Real Estate Case Study and Cash Flow with Equity.

The goal, in the context of this website, is to build a stream of income to either supplement retirement or bulk it up to entirely fund our retirement and our life’s adventures. Why else would we be talking about this?

Special Note: It is NOT necessary to work 35-45 years in order to retire and enjoy life to it’s fullest!

Real estate or investing is typically not a passion for most people. Nor is it my passion; however, I understand that it is a vehicle and if used and operated right will get me to where I want to go!

In essence it is mailbox money!

Cash flow is exactly what it sounds like. Cash or income which flows into an account which then can be used for living expenses, vacations, hobbies, or pretty much whatever you want.

The best part about it is that you don’t have to commute to a job everyday to earn the money. It just flows in without you lifting a finger!

Now that’s liberating!

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Cash Flow Real Estate Defined By Joe Nielsen