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Read Transcript for “How Can I Quickly Increase My Cash Flow?”
Everybody I know who owns a lot of properties but doesn’t have a lot of equity in them has cash flow issues. Here’s how to bring in cash flow with your properties.
“I’ve got 163 properties. I bought these over the last ten years and I’m managing them and my question is, how do you deal with cash flow problems when you have this many properties, and trying to keep everything on track…” (I’m just trying to paraphrase him here.) “…What’s the best way to increase your cash flow on a situation like this?” – Fred Wilson
Joe: There’s going to be problems with maintenance on the property; there’s always going to be an expense on that. There’s going to be problems with getting your tenants to pay on time and every month. There’s going to be problems selling those properties in order to liquidate some of that money and get cash out. Then, you’re going to have tax implications because of the capital gains that you’re making on those deals.
Joe: You have to think of a different way to bring in cash flow. I look at the business in two different parts. One is long term investment. You have these great properties and they’re going to be good long term investments. They’re going to pay for themselves. You’re going to have to put up with the headache of making those things happen, but you have them. The thing you need is a way to make your life better, which is to have cash flow. Cash flow will make any business survive. No business can survive without proper cash flow, so what you need to do to create cash flow is get big chunks of income coming in.
Joe: That doesn’t happen through rental income. Rental income may give you a small percentage coming in every month but it’s not going to give you the big chunks that you need. In your case, it’s going to be much more than this, but on the average person, if they just had an extra $5,000 to $20,000 a month, it’s going to make a huge difference to their business and what they can do and how they live. You want to have enough money to live on and you want to have enough money to support your business as its continuing to grow.
Joe: The cash flow will come from doing deals by flipping deals. You flip the deals to do the cash flow, you buy the properties to keep long term and hold them either as lease options or as rental properties to get the long term wealth.
Joe: So, I’d say focus on flipping the deals and buying properties that are either substantially under market value or just buying properties that are at market value on terms and then turning around for an assignment fee and then make $5,000 or $20,000 depending on the price range of the property.
Joe: Good luck with it, though. You’ve got a good business going. Don’t drop the ball on that, but if you don’t get your cash flow in order, you’re going to be in bad shape. So, good luck with it.