How to Find Cash Flow Positive Properties in MINUTES...

Hey guys it's Ken McElroy here and as you guys know I grew my career on finding properties that cash flow so that I personally could become financially free and of course I've taught people how to do that over the years. The question is can we still find cash flowing properties? I decided to do a short video on how to find cash flowing properties in minutes and I did this in minutes guys and I did it all on the internet from my desk and so we're going to get right into it. So obviously you guys have all heard of Zillow it's really evolving into all kinds of stuff and so are a lot of other platforms so these are available to you and you guys can do all this from home and so I started to find properties that were low price that had big rents and so that the number one thing that I want you to know is that what you're trying to look for is a large gap between the rent and the mortgage and how do you know where the mortgage is and so that's the big question because a lot of people they don't know and so here's the cool part this is actually the best part so Zillow actually shows you right here the estimated payment for this house at $110,000 is $499 a month the estimated mortgage payment so you already know this you already know that with 20% down your estimated payment based on today's rates is $499 a month but there are some steps you have to do later to verify this information but this is a great example of a property it's a three bedroom two bath 1320 square foot home so this property isn't particularly beautiful okay so as you guys can see it needs landscaping it needs some basic TLC that's for sure but it is for sale for $110,000 so now let's take a look at what Zillow thinks the estimated rent would be and this particular property based on the rental value this property rents for about $1,200 now you have to verify this yourself okay but this information is on the internet I found it in one minute I found this property and it was all on there $110,000 for the house $499 for the mortgage payment and $1,200 for the rent now let's take a look at the house itself there's a couple things I like about this house it has new wood floors new wood burning food upgraded gas cooktop and oven new flow toilets vanities in the bathroom new light fixtures upgraded cabinets still needs flooring in the bathrooms the kitchens that's good to know but also in 2018 they put on a new roof one of the things that can kill you in real estate is all that capital work after you buy something look at this property it's not bad the kitchen's nice you know the living room's nice it's decent it's a rental don't get don't get too concerned about the way it looks from the outside because you can clean that up with just some basic landscaping but here's the point what we're trying to do is look for a large gap between the rent and the mortgage okay we know the mortgage is $499 and we know the rent is $1,200 obviously you have to verify both of those but this is a very good start the difference between $499 and $1,200 is $700 so you have a $700 window to work with that is potential cash flow now it's not going to all be cash flow because there are expenses we're going to go into that next so here's another thing on Zillow they gave me this this monthly cost principal and interest is $380 property taxes $81 home insurance $39 a month now again you got to verify it no HOA that's good utilities are paid by the tenant okay so so they give you a breakdown and that $499 to my surprise is actually includes property taxes and homeowners homeowners insurance etc that's even better so now you got to now you got to take a look at okay what are the other things that it might not consider all right so we know that the rent's $1,200 but you got to add some vacancy in there and this of course is going to be market to market and based on the demand for the property and this might kill it so in other words there might be 50% vacant in that market you would want to stay away but there might be 100 occupancy too this is something that you need to check but for purposes of this video I did one month over 12 months of vacancy 12 months at 100 is 1,200 so $100 a month so I added a vacancy in there of $100 a month I took the principal and interest the tax and insurance just $499 or $500 a month I added $100 a month for repairs and I said you know what I can manage this one myself it's just one property if you don't you need to add that in so with repairs and vacancy I cash flow about $500 a month or $6,000 a year okay this is on the internet right now I'm not going to obviously buy this property I'm just trying to show you how to do this now there might be other expenses there might be other capital work that's why I showed you that there was new roof new flooring new appliances etc because those are things that can kill you here because those are real costs but somebody's already done that there is some carpet and stuff that needs to be done and maybe that's a thousand or two thousand but regardless you're going to cash flow let's let's say somewhere about $500 a month $400 a month $300 a month still good these are positive cash flowing properties I found this guys in less than five minutes on the internet all I was trying to do is find a big gap between the rent and a big gap between the expenses and find a big cash flow that's all I was trying to do and so if I can do this you can do this too and I just did it for the video for you this property cash flow $6,000 a year so now you're at the next step you know that this might be a good deal it might not be a good deal you got to check is that a true rent number is there more are there more operating expenses is this cash flow correct all those things you got to check but this is super encouraging you got almost $500 a month cash flow on this property that's $110,000 so now we go to the next step now you know this is the potential this is a potential property that will cash flow so the key is here is that you want to find eight or ten or twenty of these deals so that you if you find ten of these deals you're going to find $60,000 a year of cash flow that's what we're trying to do here we're trying to create financial freedom for you now let's go into the next scenario because a lot of you are saying I don't have the money I don't have the money for the down payment how am I going to buy $110,000 house I'm out of a job I'll show you how so the first thing you want to do is you want to make an offer now here's the cool part also on Zillow is you've got a history of this property the estimate for the property is 108 here and this is where the property's been bumping around in 2012, 14, 2016, 2018 it's gone up now it's gone down from 2020 but the point is at some point guys not very long ago it was around 70 grand that's the point of real estate investing now the rents were lower here too but the rents have gone up and the prices have gone up so don't get too concerned about this chart just know again you make your money when you buy in this particular case I like this deal because it cash flows $500 a month at least that's what I think it will right now and so you may want to offer less you may not want to offer less honestly for me I would probably just offer the full price because if it does cash flow $500 a month I don't really care about that extra $1,400 difference in the in the value so we know we know that this property is $110,000 and so the question is how do we buy it if we don't have any money at all the first thing we do is we make an offer for $110,000 and then we find the money you can do those simultaneously in other words if you go to an investor and say I think I found a property that cash flows $500 a month you're going to raise their interest they're going to say show it to me and you're going to walk through the numbers just like I did and then you're going to make that offer with a lot more confidence because you maybe have a financial backer that's we do it today now once you get rolling you can put these things in escrow and then go back to your group of investors that you might have you can use other people's money or opm or you can use yourself it doesn't really matter point is you need to find the money next in order to buy this for $110,000 and there's only two things that you need one is the debt and the other is the equity so the down payment we know 20 of $110,000 is $22,000 and you know that you're going to need a loan of about 80% the difference between the 20% for about $88,000 now again Zillow's already done this work for you if you go look at the Zillow estimate and you can get pre-qualified you're going to get your payments pretty darn close to that $500 a month for the principal and interest the taxes and the insurance all that's kind of wrapped up in here I'll let you guys go do that on your own but you get the point maybe your rate's two and a half percent maybe three and a half percent maybe it's four percent that's all going to cut into your cash flow that's all it is but the point is you just got to go find the money for the down payment and you got to find the loan and honestly the loan is pretty easy because now you have a property you take to a mortgage broker or a bank and you say I want to I want to buy this property and then they start to work because these people are in the business of putting loans on real estate that's what they do for a living and so then you have to negotiate the rate and the terms and all those kinds of things the only thing you really got to do is find this down payment and the truth is guys you can get 22 people at a thousand dollars each you can get one person at 22,000 you can take money out of your retirement account you can take a small piece of refinance out of something that you own so the next piece is to say okay what kind of return is that going to be this is what investors look for this is what you should be looking for what is the return on my money if you convince somebody to give you that twenty two thousand dollars and they invest in that property they want to know is my money secure and what's my return because they're taking it out of a stock market they're taking out of the bank they're taking it out of something and they're giving it to you for some reason that's if you're raising money but even if you aren't raising money you should be super clear on what the return on that money is so in this particular case if we have six thousand dollars of cash flow and a twenty two thousand dollar down payment that is a twenty seven percent return on your money that's cash on cash now this is how you raise money this is why you don't need money to make money because all I've done in five minutes is find a property on Zillow for $110,000 get all the information off of Zillow I still need to verify the expenses I still need to verify the rent I still need to make sure it doesn't need a lot of capital repairs because that can all eat away your cash flow in five minutes I found something that was six thousand dollars a year on a twenty two thousand dollar down payment that produces a twenty seven percent cash on cash return who doesn't want that there's no way you guys are getting that sitting in a bank account there's no way you guys are getting that in the stock market there's no way a lot of people are getting these kinds of returns so when you're looking for your twenty two thousand dollar down payment what you do is you show them that there's six thousand dollars in cash flow who's not going to invest in that when they know that they can make twenty seven percent that's how this is done you guys don't need any money and so what you do is you cut a deal with the investor you say listen I'll give you twenty percent I'll give you ten percent I'll give you fifteen percent let's do a fifty fifty deal whatever it is you cut a deal but you know you have six thousand dollars to play with and all you need is twenty two so if you don't have the twenty two you got to pay your investor and they got to pay you for all this work and that's how you cut your partnership deal right here but you do it with the real estate itself you do it with the cash flow itself you don't need the money you just need a great deal with a great return and that's how you find cash flow properties on the internet in minutes you still need to verify all the information of course but this is how you raise money on a property by property basis and investors love this stuff and this is what they're looking for if I can do this you guys can do this so good luck so if you guys like this video and you like what you saw just hit a thumbs up so lots of people can see this information as well thanks