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How to Determine Cash-Flow For Rentals

This video explains in detail how to use a parameter that is commonly used to evaluate investments in the stock market. But here you can learn how to apply this tool to income property. Looking at proeprties from a cash flow perspective helps you make a sound investment decision and eliminates confusion about values and the bad news in the media…

Note how the presenter mentions a P/E ratio of about “11″ as being a good solid cash-flow investment in Southern California. If you apply his formula to our available wholesale deal (click here), your P/E ratio will be:

$190,000 (purchase plus repairs) / $33,600 (one year rent income) = 5.64 (!!!)


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Category: Financing, Investment, landlord, Los Angeles, out of state

Comments (2)

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  1. PHILIP says:

    There is obviously a lot to know about this. I think you made some good points in Features also.

  2. Hello, could you tell us more about these things, you seems like an expert in this aspect.

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