Should I buy income property with 20% down given a negative cash flow but rising prices?
Your question prompts three other questions that result in three additional answers. The following questions and answers are based on complete due diligence and realistic and accurate evaluations.
- Is the negative cash flow projected to increase? If the answer is yes, don’t buy.
- Is the negative cash flow projected to remain the same? If the answer is yes, you can buy and hope that another fool will come along to buy a failing business from you.
- Is the negative cash flow projected to turn positive? If the answer is yes, then buy the property.
Favorable real estate returns on investment are predicated on achieving the highest probabilities for success from every investment. Number one has a very low probability for success. Number two has less than a 50/50 chance for success. Number three has better than a 50/50 chance for success.

