Business Plan for cashflow

  

Every real estate investor who owns or intends to purchase investment properties generally aims for it to be positive cash flow. That is, the income exceeds the expenses.  There are certain exceptions to this rule if one takes a portfolio approach but it is a rule that generally holds true.  The example I always give is that I have never heard of an employee who takes a job strictly for stock options and forgoes a salary. 

The one thing I have never seen with real estate investors is that they do not have a clearly written business plan for their positive cash flow.  There is no mention as to whether they should reinvest it by paying off the mortgage, purchasing another property or even other assets such as precious metals, paper assets (stocks, bonds), cryptocurrencies etc. 

This makes no sense as the excess cash flow can be a formidable investment tool by itself. Aside from a proper reserve fund (which can be up to 6 months income), one should always have a plan as to what to do with funds. 

Seek out the appropriate experts if you wish to diversify your assets, that is one rule that will never go out of style.