I've read lots of real estate books that tell you how to make money in real estate, but they never seem to tell the whole story. They always provide examples of making money by buying a property, then selling it for a profit. Essentially, any profit comes from price appreciation. This leaves me wondering...what about cash flow? These books normally talk about buying as many properties as you can, and placing as little money down as possible. Essentially, being highly leveraged will increase the return on the small amounts down.

     I really don't like this method of investing. I think it's better to put a decent amount of money down on few properties, and little money down on lots of properties. Then, try something foreign to many real estate investors in today's market: Hold on to those properties! Run the properties so you can turn a monthly profit and enjoy the tax benefits. Over time, your tenants will pay your mortgage and other expenses, while you have a profit and enjoy tax benefits. You can then reinvest that money into more properties. If those properties are well run, then more properties will equal more profit.

     The moral of this story: Don't get hung-up on price appreciation. Put down enough money to turn a solid monthly profit and reinvest that profit in order to increase your revenue.