New BiggerPockets Article: The Myth of Cash Flow
Cash flow keeps you solvent, you don't get rich off of it
This is an excerpt from an article originally published on BiggerPockets.com
One dead giveaway that a real estate influencer is really more of a fake guru is an overemphasis on cash flow. Sure, it’s not as big a giveaway as having multiple clips of said “influencer” partying on the beach in what ostensibly is an educational video on real estate investment. But overemphasizing how great cash flow is still highly dubious.
That, of course, doesn’t mean that cash flow is useless. It is, in fact, very important, but not for the reasons most gurus would have you believe; namely, after a short while in real estate, you can live a luxurious lifestyle off cash flow alone.
Cash flow is mostly just a way to keep you afloat, but we will get to that shortly. For now, let’s talk about the current real estate economy.
In today’s market, where prices are still going up, and interest rates are about double what they were five years ago, achieving positive cash flow on an investment house with a loan is extraordinarily difficult. The BRRRR method—where you attempt to be all-in on a property for 75% of its value and then refinance out your entire investment with a bank—is all but a non-starter.
Indeed, the BiggerPockets forums are littered with discussions about this:
And on and on it goes. Even David Greene, the guy who wrote a book called BRRRR, now points out that “You CAN’T rely on cash flow anymore.”
By the Numbers
Is that true? Is it really so bad? Well, let’s look at the numbers.
We’ll run the numbers by using some actual market statistics. In Jackson County, Missouri (Kansas City), where I live, the median home sale in January 2025 was $250,000. I could use the average sales price of $306,586 to make my case even stronger, but I’ll go with the lower median value since I think it is more representative of your typical sale.
To read the read the rest, please visit to BiggerPockets.com
You can find my other book, Awesomeness, here.
And the audiobook here.
And please subscribe to my YouTube channel.
hello Andrew, finally read one of your articles. this is more a nostalgic sidebar and not a request for guidance. (i'm mostly done w/ BP except i liked your article about cash flow and religiously listen to Dave Meyer's On the Market.) i went to Rockhurst high school a LONG time ago and now live in central Oregon. i was amused at your personal history (including your dad's) about these "places". experientially, i agree w/ your assessments, especially vav the totally crazy upside down re mkts in the west. for example, here in central OR, house prices even slightly above the median in good neighborhoods are on track to easily go higher than 5% yoy for 2025 - despite the uncertainty coming out of Trump's Washington DC. i wish you all the best............... Harry H.........