Why We’d Buy a Rental Property That LOSES Money Every Month…

Why We’d Buy a Rental Property That LOSES Money Every Month…

Episode #949

Would you buy a rental property that loses money every month? What if, in a few years, that one property could make you hundreds of thousands of dollars? Would the negative cash flow be worth the massive appreciation upside? Today, we’re answering that exact question from an investor who could be sitting on a wealth-building opportunity but doesn’t know what decision to make. Should he buy the “bleeding” property at a steep discount or give up this needle in the housing market haystack to avoid a cash flow trap? Let’s find out!

We’re back on Seeing Greene as David and Rob, your go-to real estate investing experts, answer questions directly from “BiggerPockets Real Estate” listeners like you! First, an investor has a rare opportunity to buy “Grandma’s house” with over $200K+ in potential equity upside. The problem? It will LOSE $800/month! Next, a new property manager wants to know how to raise rents on a twenty-year tenant. Do you pay capital gains on the profit of your home sale or the entire amount? We’ll show you how to know how much you owe. Then, an investor debates selling his C-class cash-flowing properties in exchange for appreciating assets, and we explain the “sneaky rental” tactic that’ll take you to ten rental properties in no time!

Want to ask David a question? If so, submit your question here (https://www.biggerpockets.com/david?utm_source=youtube&utm_medium=description&utm_campaign=none) so David can answer it on the next episode of Seeing Greene. Hop on the BiggerPockets forums and ask other investors their take, or follow David on Instagram to see when he’s going live so you can jump on a live Q&A and get your question answered on the spot!

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Ask David Your Real Estate Investing Question:
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Pillars of Wealth: https://store.biggerpockets.com/products/pillars-of-wealth?utm_source=youtube&utm_medium=description&utm_campaign=none
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Raising Rent Episodes with Dion Mcneeley:
Real Estate Podcast 448: https://www.biggerpockets.com/blog/biggerpockets-podcast-448-dion-mcneeley?utm_source=youtube&utm_medium=description&utm_campaign=none
Real Estate Rookie 369: https://www.biggerpockets.com/blog/rookie-369?utm_source=youtube&utm_medium=description&utm_campaign=none
Other Podcast Episodes Mentioned in Today’s Show:
Real Estate Podcast 169 (w/David Greene!): https://www.biggerpockets.com/blog/2016-04-07-bp-podcast-169hustle-persistence-build-wealth-real-estate-david-greene?utm_source=youtube&utm_medium=description&utm_campaign=none
Real Estate Podcast 941 (Seeing Greene): https://www.biggerpockets.com/blog/real-estate-941?utm_source=youtube&utm_medium=description&utm_campaign=none
Connect with David and Rob on BiggerPockets:
David: https://www.biggerpockets.com/users/davidgreene24?utm_source=youtube&utm_medium=description&utm_campaign=none
Rob: https://www.biggerpockets.com/users/robuilt?utm_source=youtube&utm_medium=description&utm_campaign=none
Connect with Rob (Robuilt):
Instagram: https://www.instagram.com/robuilt/
TikTok: https://www.tiktok.com/@robuilto
X/Twitter: https://www.twitter.com/robuiltchannel
YouTube: https://www.youtube.com/c/Robuilt
Follow David and BiggerPockets on Instagram:
@davidgreene24 or https://www.instagram.com/davidgreene24/
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Show notes at: https://link.chtbl.com/BPRE

00:00 Intro

01:23 Losing $800/Month to Make $200K?

11:38 Raising Rents On 20-Year Tenant

21:06 Comment Section & Capital Gains 101

25:02 Trade Cash Flow Portfolio for Appreciation?

32:20 The “Sneaky Rental” Tactic

37:36 Ask Us Your Question!

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