Cash is king and so is cash flow. I've heard investors talk about buying a property and having negative cash flow for several years. While this may be advisable in very rare cases; in most instances, it is a bad idea to purchase an income property and lose money from the beginning.
For instance, suppose you purchase a property for 100k with our 10k down payment. If we are able to make just a $100 per month in cash flow, this is what we call positive cash flow. From cash flow alone we've increased our income to $1,200 per year, which is 12%. Cash flow is very important to real estate investors and we never recommend entering into a negative cash flow situation unless you know for a fact that the property has some huge appreciation potential. Most people that buy investment real estate and lose $100 per month instead of making $100 per month, do so on bad advice. You should never purchase an investment where you know that you will be losing money. It's easy enough to lose money on good investments. And, any one that tells you otherwise is not doing you a favor. If your numbers don't work, then either move on to the next deal or figure a creative way to make the deal work and still produce positive cash flow.