Cash Flow

What’s up everybody, Mike Black here with CR of Maryland.

Today we are going to talk about cash flow. What is cash flow?

Cash flow in simple terms is, what is your income after all your property’s expenses. Your property expenses can be: property tax, insurance, property management fee, maintenance, utilities, things like that.

With us in the Baltimore market and how we operate, you are likely when you get funding you are going to get your lender to do a PITI payment, which is principal, interest, taxes, and insurance. That should be a part of your mortgage payment.

As far as the property management fee, we do have a 6% fee that we charge for the first two years. After that it is 8%.

The maintenance, there should be little to no maintenance, due to the fact that our properties are brand new from the inside out. We do a full renovation, full gut, in all of our properties.

Then utilities, those are all charged back to the tenant. So, really, the only big expenses that you are going to have, or any expenses, are going to be your property management fee and your maintenance, which should be little to none.

Cash flow – what are you getting after your rent comes in. So $1500 minus your mortgage of a thousand dollars, that’s $500 there, minus your expenses, whatever they may be. That is your cash flow, per month.