What is Cash Flow?
In real estate investing, “cash flow” is the term applied to the cash outflow that goes to investors or owners. It’s the income the property generates after accounting for all expenses, such as mortgage payments, property taxes, property management, and maintenance costs.
For example, if a real estate investor owns a rental property that generates $10,000 in rental income each month and has $8,000 in monthly expenses, including mortgage payments, property taxes, and maintenance costs, the cash flow for that property would be $2,000 per month.
In the context of an investment fund, cash flow is essentially the cash distributions made to investors.
Cash flow is usually discussed as a pre-tax figure, as investors must pay taxes at their allocated rate.
As sponsors of real estate investments and investment funds, Fish Capital’s role is to maximize returns in part by maximizing cash flow. We aim to increase cash flow for investors by implementing strategies that increase income and reduce expenses.
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