Real Estate Investing with Coach Carson · Chad Coach Carson

#436: How Much Cash Flow Should Your Rental Properties REALLY Be Making?

·26 min·2 clips

Why do investors buy properties with low cash flow? Chad Carson uncovers the hidden math behind growth speculation.

Cash flow sounds simple at first. Carson slows the question down because $100 per door, 10% cash-on-cash return, and as much as possible are three different answers wearing the same hat. Start with the dollars. Then compare those dollars with the return on the cash flow, while keeping the mortgage version separate from the no-mortgage version. Debt can make the same property look very different once payments enter the picture. From there, location starts messing with the neat math. Carson compares class A and class C property, using New York and Detroit to show why raw cash flow can fool you. More cash flow feels good. But if an older property also brings capital expenses and more hassle, that extra yield may have a price. Lower cash flow is not automatically a weak deal either. Someone taking a 4.25% cash-flow return may be counting on rents and property value to grow around 5%, which could land near a similar total return. That bet is still a bet. Carson keeps the growth side grounded, even when investors point to population growth, supply factors, or other regional reasons. Detroit has its own version of the tradeoff. A 7.25% cash-flow return plus only 1% or 2% growth might land in a similar total-return range, just with different work and uncertainty. The useful move is comparison. What is each return stream paying you for? Does the cash flow, growth, hassle, and debt structure fit your threshold? Carson closes with formulas, a cheat sheet, and a back-of-the-envelope rental analysis video, all pointed at applying the math to real properties.

As heard by us

A practical cash-flow framework for figuring out what a rental really has to earn.

Coach Carson treats rental cash flow as a measurement problem, not a slogan. He asks what the money is earning and how much is enough in 2025, then works through four versions of the math, splitting amount from return and mortgage from no mortgage.

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Why you'd press play

Pressure-test your rental cash flow before you judge a deal on a headline return.

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