Collecting Keys - Real Estate Investing Podcast

Rentals & Cash Flow: What Landlording Really Pays

Buy-and-hold rentals are still the classic wealth builder, but Mike DeHaan, Dan Austin and Dylan Koch spend a lot of airtime stress-testing the "passive income" pitch using their own P&Ls. This guide covers what the show has said about real cash flow math, reserves, rising taxes and insurance, return on equity, and when to sell instead of hold.

Start with these episodes

What does rental cash flow actually look like after expenses?

The most repeated point on the show is that advertised cash flow is a pro forma, not money in your pocket. On EP 49, Dan walks through a real Spokane 3/2 in their portfolio: $2,200 gross rent, $1,200 PITI, $100 of landlord-paid water and sewer, then 10% for operating expenses, 10% for CapEx and 5% for vacancy. That leaves about $450 a month. Actual cash leaving the account is only $1,300, so the pre-reserve number always looks better than the real one — but the reserves still have to be funded.

Those reserves exist because one item can erase a year. Dan notes a furnace with an AC coil runs roughly $9,000 in their market, about what that property produces in a year of cash flow plus set-asides. On EP 155 they put their own books on the table: the joint portfolio should cash flow about $9,400 a month after set-asides, but roughly $20,000 of expenses across two months — non-paying tenants, a Section 8 payment lag after a property manager switch, a sewer line, multiple hot water tanks — pushed the account backwards.

From: EP 49 · EP 155 · EP 95

Why did taxes, insurance and turnover wipe out cash flow after 2022?

The hosts argue the damage came from carrying costs, not purchase prices. On EP 274 they cite a property where taxes went from $2,800 to $4,000 and insurance doubled from about $60 to $120 a month — roughly $2,000 a year of cash flow they couldn't recover with rent increases. On EP 295 a triplex reassessment took the tax bill from $3,925 to $7,863 a year. On EP 241 Mike describes mortgage payments jumping $300–$400 a month while rents stayed flat.

Rents haven't cooperated either. Dan reported roughly a 5% rent decline in Eastern Washington and Northern Idaho, and by EP 470 Mike's triplex units had come down from $1,700 to $1,400 while taxes climbed, turning a property that once cash flowed $2,800 a month into a money loser two years running.

From: EP 274 · EP 295 · EP 241 · EP 356

Why did Mike sell his rentals, and does Dan agree?

On EP 356 Mike lays out his reasoning. His portfolio peaked at 54 units in 2022 and was down to 26; passive cash flow had fallen from roughly $10,000–$12,000 a month to about half that, and his return on equity had dropped to 2–3%. He also points out that trade costs roughly doubled, with roofs going from about $7,000 to $15,000 and HVAC from about $6,000 to $12,000, and doesn't expect those to come back down.

On EP 476 he reviews five years of P&Ls and finds a year that netted about $100,000 in cash had become roughly a $45,000 cumulative loss once CapEx, turnovers, taxes, softer rents and longer vacancies are counted. The hosts don't fully agree. On EP 437 Dan says his net worth is still about 75% real estate equity; he's been selling underperformers alongside Mike but keeping legacy properties that cash flow well, while growing private lending at around 12% for liquidity. Mike's plan is closer to dry powder and fixed-return notes.

From: EP 356 · EP 476 · EP 437 · EP 343

Cash flow or equity: how has their thinking changed?

Back on EP 26 in 2022, Mike and Dan already argued that cheap high-cash-flow properties usually lose to better-quality properties over a 7-to-30-year horizon once CapEx, appreciation and exit liquidity are counted. By EP 90 they were shifting local marketing toward small multifamily specifically because raising NOI on a five-plus-unit building creates equity a single-family house can't.

The framing eventually narrowed. On EP 272 Dan describes cash flow as a defensive metric — enough to fund maintenance and keep the property from deteriorating — with the real return coming from debt paydown, tax benefits and appreciation. EP 283 is the counterweight: equity doesn't pay bills, and they had put over $100,000 back into properties in four or five months on roofs and major repairs.

From: EP 26 · EP 90 · EP 272 · EP 283

When should you sell, refinance or keep a rental?

Return on equity is the metric they keep returning to. On EP 190 Mike describes properties making $400 a month while $180,000 of equity sits trapped. On EP 164 they sold an eight-unit partly because the cash-flow return on equity was around 2% and the building was an outlier two hours from everything else they owned — after raising rents from about $495 to $750 a unit.

Dan uses a rough seven-year ownership cycle: that's when roofs, furnaces and the finishes you installed start failing, so sell before you renovate the same property twice. On EP 401 Mike adds that the best investors he knows hold three to seven years, and that paying tax on the gain is acceptable. On EP 373 his accountant told him to pay the taxes rather than force a mediocre 1031 purchase — after loan and transaction costs the exchange would have saved very little.

From: EP 190 · EP 164 · EP 401 · EP 373

Do Section 8, short-term, midterm or co-living rentals fix the problem?

Sometimes, with tradeoffs. On EP 375, Columbus investor Josh Bauerle explains that Section 8 rents in his county are set by bedroom count and averaged countywide, so properties in lower-rent pockets can rent $400–$500 above market, and tenants tend to stay. The cost is front-end friction: inspections, paperwork and approval that can take up to two months. Mike and Dan have said repeatedly that Section 8 tenants aren't a red flag — screen them like anyone else.

On short-term rentals, EP 58 guest John Bianchi gives an order of operations: check regulation first, then prove the data supports cash flow, then worry about operations. He warns against arbitrage, which carries a lease's liability with no asset. On EP 142 Sarah Weaver walks through midterm rentals using Furnished Finder stats and direct outreach to nearby hosts. On EP 273 Sam Wegert describes converting single-family houses into co-living, with one house that would rent for about $2,400 filling at $8,550 across rooms.

From: EP 375 · EP 58 · EP 142 · EP 273

Is landlording passive, and what do the hosts do instead?

No. On EP 190 Mike says that with a property manager your job becomes managing the manager, and on EP 72 he describes a manager leaving two rentals vacant for nearly two months — he listed them himself and had both leased quickly, after roughly $10,000 in lost rent and utilities. On EP 84 Dan lays out his self-management stack: property management software for ACH rent and lease storage, Asana for recurring tasks with Loom videos, and a virtual assistant acting as remote property manager.

That's the backdrop for what they call "massive income over passive income." On EP 278 Mike argues replacing a $100,000–$200,000 W-2 with rental cash flow is far harder than learning to make a large active income; he says he originally targeted financial independence at 50 through cash flow and hit it at 33 by focusing on deal flow instead. Their answer to thin returns is buying at a discount and forcing equity — on EP 405, a duplex bought at $195,000 with about $70,000 of work appraised at $450,000 after cutting stairwells into the basement to create two 3-bed/2-bath units.

From: EP 190 · EP 72 · EP 84 · EP 405

Frequently asked questions

How much cash flow per door is realistic?

On EP 190 Mike and Dan put realistic net-net cash flow for small multifamily and single family at roughly $150–$250 per door, and argue that at $250 a door you should be targeting a 12–15% cash-on-cash return, not 6%.

How much should I keep in reserves?

On EP 95 they suggest taking no cash flow for the first 12 months on a newly acquired property and building toward roughly $10,000–$15,000 per property. Their underwriting typically sets aside about 10% for operating expenses, 10% for CapEx and 5% for vacancy.

Did Mike DeHaan sell all his rental properties?

He has been selling down a portfolio that peaked at 54 units in 2022. On EP 356 he cites a return on equity of 2–3%, cash flow cut roughly in half by taxes and insurance, and capital expense costs he thinks can outrun appreciation.

Should I buy for cash flow or for equity?

Their view has shifted toward treating cash flow as a defensive metric that funds maintenance, with returns coming from buying at a discount, forcing equity, debt paydown and tax benefits. They're consistent that thin or negative cash flow only makes sense with strong terms, real equity and other income. This is educational, not investment advice.

All 156 episodes on rentals & cash flow