How to Make Any Rental Property Cash Flow (Before You Buy)

How One Triplex In Buffalo Forced An Investor To Rethink Price And Financing

When a voicemail turned into a possible off-market triplex, the simple numbers didn’t add up. This episode follows Ashley, a local investor who inherited a rare lead from a banker who saved her card for three years, and Dave Meyer as they walk through the exact spreadsheet work and mindset shifts needed to decide whether to make an offer.

Start With What You Can Change: Price, Financing, And Rehab Timing

The pair run the property through a thorough income and expense model: current rents, conservative rent growth, taxes, insurance, vacancy, maintenance, and capital expenditures. The initial ask of $275,000 produces a negative monthly cash flow under conventional bank financing amortized over 20 years at current interest rates. That bleak result doesn’t mean the deal is hopeless; it means the investor must manipulate the levers that won’t compromise long-term viability.

• Purchase price is the most powerful variable: lowering the offer dramatically improved cash flow in the model.
• Financing structure can convert a loser into a near break-even or modestly profitable asset—seller financing drastically changed outcomes here.
• Rehab timing matters: modest, targeted improvements to increase rents over time were valued more than a higher appraisal now.

Why Seller Financing And Packaging Properties Matter For Cash Flow

Ashley explores three routes: a DSCR or commercial small-bank loan with 20% down, and seller financing. The episode shows how seller financing—low down payment, 3% interest, 30-year term—can reduce monthly debt service and push a marginal deal toward break-even. They also discuss packaging the triplex with an adjacent duplex as a combined offer, giving the seller flexibility to allocate value between properties while creating better economics for the buyer.

The conversation also explains the rise of Debt Service Coverage Ratio lending for residential investors, where underwriting focuses on the property’s ability to cover debt rather than the borrower’s W-2s, an important nuance when comparing loan products.

Model Conservatively And Vet Variable Expenses

Dave and Ashley emphasize conservative modeling for older properties: 8% line items for vacancy, maintenance, and capital expenditures; a 10% management fee even if self-managing; conservative rent growth projections; and clear estimates for insurance and municipal taxes. Those conservative allowances help avoid unpleasant surprises and create a negotiation baseline when presenting analysis to sellers.

Negotiation Tactics You Can Use Tomorrow

• Run two offers: one conventional bank offer and one seller-financed offer with different price points and terms.
• Use a calculator report to present realistic cash flow scenarios to a seller who may not appreciate variable expenses.
• Consider creative packaging—buying multiple properties as a bundle can help bridge seller expectations and buyer returns.

Ultimately, this episode demonstrates that a bad headline number isn’t the end of the road. By shifting the purchase price, negotiating terms like seller financing, and staging renovations to increase rents over time, an investor can change a losing scenario into a workable, longer-term investment. The final take: thoughtful modeling combined with creative offer structures matters more than the initial sticker price.