In this follow‑up video, Mendell Gosnell, CPM, expands on his earlier discussion of cash flow as one of four wealth‑creation drivers for rental‑property owners. He explains that low cash‑flow months are normal fluctuations and should be met with a diagnostic mindset rather than panic. Gosnell outlines a series of concrete questions owners should ask to pinpoint the drivers behind a cash‑flow dip—such as unexpected repairs, leasing costs, deferred maintenance, capital improvements, and reserve planning. He stresses the importance of evaluating year‑to‑date performance, rent growth, and whether the property remains on track with its long‑term plan. Depending on the findings, he recommends strategic responses: optimizing expenses, raising rent, renovating, or, if the asset consistently underperforms, selling (potentially via a 1031 exchange). Throughout, he advocates maintaining a long‑term perspective, avoiding emotional, rash decisions, and using data‑driven analysis to guide actions. The video serves as a practical guide for real‑estate investors to interpret cash‑flow fluctuations, assess property health, and decide on corrective or exit strategies.
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So this is part 2 to another video that I did regarding cash flow and how so many owners only evaluate cash flow. And we talked about the 4 drivers of wealth creation, how cash flow is just one element and sometimes the smallest element of those. And so, but I wanted to do a follow-up video regarding cash flow on kind of just preparing yourself for the long term and how do you respond when you have a low cash flow month. So, you get your report, look at your bank account, you go, "Gosh, I didn't get any cash flow. The cash flow was significantly low." So, what are some questions instead of get stressed out or yell at your property manager or blame everybody else. Understanding that you're going to have these ebbs and flows. It's really about reframing and asking good questions. And so, When an owner tells me that their disbursement felt low, the question isn't, is this bad? It's— it could be bad, but the reality is, is it's normal for fluctuations to happen. But the real question is, is what's going on? What's the driver of this? And does it make sense? Do we have some answers for it? So, you know, the real questions might be, was there a repair that protects the long-term value? Was there a necessary repair? Okay. The water heater went out, we had to repair the water heater. Oh, I'm so grateful that you guys did that. I'm bummed because it really hurt my cash flow, but that's amazing that you guys went out there on a holiday weekend at night because all water heaters, they break either in the evening or on the weekend or during a holiday. I'm so glad that you guys took care of that. Thank you so much, um, appreciate it. So again, the questions that you're going to ask were, did leasing costs hit this month? Were there some additional costs that that we knew were coming, but maybe costs got doubled up, or, you know, and so again, looking at the reasons why and understand that we're going to see some fluctuations. So are we looking at year-to-date performance? Um, is rent growth improving? So, you know, are the fundamentals still sound? We just are seeing some of the expenses come due. We had to do some landscape around the property, and that was a big hit. We had plumbing issues that we had to get to. We had some deferred maintenance. We had some known capital improvements that finally came due. And I know I should have set money aside for reserves so it would come out of the reserves and not hit the cash flow, but I didn't. And so, but thankfully we had the cash flow to be able to cover it. So these are all questions or thinking that we need to be mindful of. So is the property moving in the right direction toward the long-term plan, even though there's fluctuations, right? Sometimes the right answer is to optimize expenses. Sometimes it's to raise rent. Sometimes it's to renovate. And sometimes the correct conclusion is simply, hey, this is just a normal month in the real estate cycle. And I need to have that, again, long-term perspective, understand there's gonna be fluctuations, and not to make a rash decision based on emotion, but really look at the facts. And again, there's sometimes properties are just not good cash-flowing properties. And they're not appreciating, they're not meeting your goals, and it would be better just to sell. You don't have a vision for improving the property and 1031 into another property. But I do really, I'm a big believer in real estate, so I always want to encourage people if they do have to sell, you know, make a long-term plan so that you can sell on your terms and not, you know, based on, again, emotion and sell at the wrong time and lose out. So I hope that helps, and I hope that helps with your framing and understanding. Good questions to ask when you see low cash flow— it's not the end of the world, it's normal— but understanding what are the drivers to it, and are there things that we can correct, or is this just, hey, the, the bill came due for some of these expected, um, unexpected expenses, right? Those unexpected expenses are— should be really expected. All right, thanks for watching.
