The #1 cash flow play in real estate

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What's up guys? It's James here and in today's video I'm going to talk to you about why short term rentals are the number one cashflow play in all a real estate investing. Get at me, I'm going to talk to you about why this strategy is in my opinion from what I've seen, and I invite you if you think you have, you know, a better cash flow strategy than short term rentals for real estate investing, then let me know hit me up in the comments down below, I would love to take a look.

But from everything I've seen, whether it's storage lockers, whether it's long term rentals, whatever it might be, I have yet to come across any real estate investing opportunity that provides better cash flow than a short term rental property and Airbnb property. Now, obviously, there are different benefits pros and cons to any strategy, right, you can be focusing on equity building, you can be focusing on appreciation, you can be focusing on cash flow. Now, for me, I like cash flow. Why? Because cash flow pays the bills, that's a really great way for people to replace their income, it's also a really great way to give you usable capital that you can go to use to expand and grow your portfolio.

You know, building equity or building appreciation is great. But that's really just kind of imaginary on the appreciation side of it until you actually sell the property that appreciation is really just a figment of your imagination until you actually sell and the equity that you build by paying down the mortgage. And that's a lot more real. However, you're not going to be able to actually use that money until you refinance or sell the property or pull out a home equity line of credit. So it's not as accessible. Whereas the cash flow generated from the property that is money in my bank account, I can go to an ATM, pull that out and cold hard cash. And I'm going to use that for whatever I want.

So that's one of the really big pros in my opinion of cashflow knots, why I've adopted a lot of short term rentals in my overall real estate portfolio. I'm going to talk to you about why they cashflow so well, I'm going to break down some numbers for you. Now if you are interested in buying these cash flowing assets, you want to invest in short term rentals, you want to make sure that you know how to find the right property and manage it effectively so that you can be cash flowing as high as possible and bring in 4050 $60,000 a year on just one property. And I'm talking cash flow not revenue, then you'll want to click the link down below to schedule a quick 15 minute chat with me.

So you can find out more about how we might be able to help you to scale your portfolio whether you're just getting started and want to buy your first short term rental property, or you've already got some properties and you want to buy your next or you've got long term properties or other types of investments. And you want to get into short term rentals. Again, just go ahead and click the link down below, you'll see it in the description there, there's a link to schedule a 15 minute chat with me, in that 15 minute call, we can talk more about how I might be able to help you to grow your portfolio.

I'm gonna be working with a really, really small, intimate group of people in a private mentorship program over the coming months here showing them exactly how to get started investing in short term rental properties, how to do it in the most effective way possible, not this for a number of years now. So I've learned a lot of the ins and outs and the mistakes to avoid. So we're going to be working with people holding their hands investing right there alongside them in short term rental properties. So if you want to learn more about that, if you think you're interested in getting involved, then just go ahead and click the link down below.

And I'd love to have a quick chat with you to see if we'd be a fit. Now all that said, let's talk a little bit more about the details of this strategy and the details of the cash flow. You know, the main question being How much does it property cash flow? And the quick and easy answer is obviously that it depends. But I want to take one of my most recent investments and break it down to use it as an example. Now, the reason these properties cashflow so incredibly well is because they're uniquely more valuable as short term rental properties than they are as any other kind of property.

There's no other use case that makes them as valuable. If you look at something like for example, commercial real estate, it's being sold not based on what the property or the land is worth. It's being sold based on the cap rate the capitalization rate. In other words, they're basically using a calculation that is completely based on as a foundation how much money that property generates. And that's how they determine value. So the value of the property isn't based on the value of the land or the building or anything else. It's based on the value of the cash flow, what you're buying is an income stream.

And so because of that you can't buy properties that cash flow insanely well, because the cash flow is obviously taken strongly into consideration when determining the value of the property so much so the value is actually based on that. So there's never this arbitrage where you can buy a property that's going to cash flow way better. Now, obviously you can go and renovate that property, you can make it a lot more valuable through those renovations to tenants, then you can rent it for more and you can build a whole lot of appreciation in that property because now

When you bought that property and you've made it more a higher cash flowing property, then naturally it is going to be worth more, because you're again basing the price off of that now increased cash flow. So there's an advantage that I'm not knocking that strategy. But what I am saying is that you're never going to be able to really hack cash flow with a larger commercial property, you're not gonna be able to buy it. And then suddenly, without doing anything to the property, just have it cash flowing incredibly well, it's just not going to happen. Whereas in the short term rental property, these properties are very rarely being sold based on the cash flow.

More likely, it's being sold based on the comps in the market, because you're buying in a residential area, you're not buying commercial property, and other people aren't looking at using it as a short term rental. So you're buying a property that is just based off of essentially what people are willing to pay for it, supply and demand, what the market value is of that property has nothing to do with the potential income of the property. Now, let's say that the people that are buying in that area are only willing to spend maybe four or $500,000 on this home.

Well, there's nothing that says that that home on short term rental can't bring in $100,000 a year. In fact, that's what we actually did on one of our most recent deals. Now, obviously, if this was commercial property, it could bring in $100,000 a year as a commercial property, then the price would be reflective of that it'd be worth far more money. But because people aren't looking at the property, that way, they're looking at just as a single family home, they're not adjusting the value of the property accordingly. So that's where there's these really great opportunities, you can buy properties that for whatever reason, are incredibly valuable to the people in that market.

So for us, that meant buying property in cottage country, where the main draw to that area is being lakefront. So we bought a property that wasn't on the lake, it was across from the lake. And in fact, we did that just again, on a second property recently, because the numbers just made so much sense. For the short term rental, we didn't really have any reason to need to be right on the water being across the road from the water was just fine. But for everyone else buying in that in that area, they want to be right on the water so that they could have a dock and dock their boats there. So the property wasn't really valuable to the average person that's buying properties in that area.

But for us, we identified Hey, this is a really great opportunity, this is a really key property, we can really make a killing on this. And we projected that on the low end, it would bring in about $50,000 worth of income. And that would make it a total knock out of the park when it would still be a really good scenario to be in in that $50,000 a year income range. But we figured that's the most conservative estimate, we can generate more realistically, we're probably going to bring in about 80 or 90, and maybe in a best case scenario, bring in 100 or 120.

Well, since buying that property, we're actually trending closer towards that 100 120 Mark, we've already hit $80,000 in bookings for that property. And not only between July, June and middle of September. So that's a very small portion of the year, it's trending as though that property is actually going to do better than $120,000 in revenue. Now, I'll report back once we've gotten through an entire calendar year. And I'll update on how that property actually did. Because frankly, even I don't believe at the property can do better than $120,000 a year. If we do how this property is trending to do, we're literally going to be cash flowing $120,000 in one single year on this property.

Now, just try to wrap your head around that that's absolutely insane. That means that we'll be able to profit cash flow 100 to $120,000 on one property in one year that we bought for $500,000. That's just bonkers. just incredibly crazy. That doesn't make any sense. Now that's if we do as well as the property's trending to do, which again, the jury is still out on that's trending towards about 160 to $180,000. This year, which again, I just frankly, can't even wrap my head around. But let's say that we just do as well as it's looking like we're pretty safely going to do this year, which is 100 to $120,000. Like I said, we're already booked at $80,000. We've got a lot of room left in our calendar.

So let's say we do 100 to $120,000. That means that this property that we bought for $500,000 is going to be cash flowing 4050 $60,000 can depends a little bit where we end up on that spectrum of 100 to 120. That means we're going to be making certain between 40 and $60,000 in cash flow just from that one property. Now think about that. That means that with this strategy with two properties, you grew a place an average high income earner salary with just those two properties and cash flow and think about the amount of work that it takes to have two properties.

It's honestly very, very minimal if you compare it to A nine to five job and a whole lot more enjoyable and a whole lot more freedom that gives you let alone the fact that you can then do it from anywhere in the world, you can scale it up beyond that be earning double what most people are making in their full time jobs, the numbers just start to make sense. Now, am I saying this is the end all be all the best possible strategy for investing in real estate? No, I'm not. But I am saying that I've yet to see anything else that performs better than this strategy for my cash flow perspective.

So let me know in the comments below, if you think of anything, you've seen anything you've experienced anything that can cash flow better in the real estate space, the real estate, investing space, then buying short term rental properties. And if you want to get involved in this, if you want to start leveraging this strategy and start getting the kind of results that we're getting for yourself, then let me know just go ahead and click the link down below schedule a quick 15 minute chat with me and I'd love to talk about how we might be able to help you to start investing in these property start buying CDs, winning short term rental properties to invest in for yourself.

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