Ultimate Coach – Cash Flow Portfolio Building – 2nd July 2025

In this week’s webinar you’ll join Ultimate Coach Michael Franks for Part 2 of the Cash Flow Portfolio Building series.

Michael will give you an understanding of how to build a cash flow-positive property portfolio using structured due diligence and portfolio tracking techniques. You’ll learn the importance of accurately analysing income-producing properties, ensuring every number and expense is accounted for.

You will explore how to use his custom-built due diligence and portfolio tracker spreadsheets to assess existing properties and potential acquisitions, identify cash flow gaps, and make informed decisions about your portfolio’s performance.

Why Numbers Matter

The session opens by emphasising that knowing your property’s performance depends entirely on gathering the right numbers. Many investors focus only on purchase price and rent, but overlook expenses, loan types, loan terms, and other hidden costs. Michael stresses that incomplete numbers lead to false impressions—either overly optimistic or unnecessarily negative.

By capturing all relevant data through a structured checklist, you gain an accurate picture of each property’s performance, allowing you to:

• Identify poorly performing properties for potential sale.
• Adjust property management or loan structures.
• Understand how different property types and uses impact cash flow.

Introduction to the Due Diligence and Portfolio Tracker Sheets

Michael introduces two key tools:

• Due Diligence Sheet:A printable form used to collect data manually in the field or during desktop research. This form captures purchase price, rent, operating expenses, loan details, and unique factors like property type and use.
• Portfolio Tracker Spreadsheet:A digital tool where data from up to five properties is entered. It automatically calculates:
  • Gross and net rental yields.
  • Loan-to-value ratio (LVR).
  • Cash flow per property and for the overall portfolio.

Michael explains how these sheets help investors move from vague estimations to precise portfolio management.

Real-World Examples

To demonstrate how loan amounts, loan types, and operating expenses affect cash flow, Michael walks through real property examples, including:

• Boarding House in WA:
  • Purchase price: $1.4 million.
  • Weekly rent: $2,700.
  • Net rental yield: 6.72%.
  • Key insight: Adjusting the loan from $1.12 million down to $620,000 increased cash flow from $3,390 p.a. to $43,903 p.a., illustrating the profound impact of loan structuring.
• Metro Single Let Property:
  • Purchase price: $955,000.
  • Weekly rent: $700.
  • Loan amount: $161,000 remaining.
  • Result: Despite low borrowings, a short loan term created negative cash flow, highlighting the importance of aligning loan terms with investment strategy.

Through these examples, Michael illustrates common issues investors face, such as:

• High operating expenses eroding profit.
• Over-borrowing leading to negative gearing.
• Misunderstanding how interest-only loans affect long-term cash flow when they revert to principal and interest repayments.

Key Lessons on Loan Structures and Equity

You will learn how different loan structures influence portfolio performance:

• Interest-Only Loans:Provide higher short-term cash flow but can lead to negative cash flow when reverting to principal and interest.
• Principal and Interest Loans:Offer long-term stability but reduce short-term cash flow.
• Loan-to-Value Ratio (LVR):Ideal LVR varies; Michael demonstrates how each investor must find their balance between risk and return using real data rather than guesswork.

Michael also explains the importance of understanding how drawing equity from one property to fund another does not affect the first property’s cash flow calculation. The borrowing responsibility is attached to the new property, not the one the equity was drawn from.

By the end of this session, you will be equipped with a structured, repeatable system for accurately assessing your portfolio’s cash flow health. Whether you are just starting out or managing multiple properties, applying these techniques ensures that your investment decisions are grounded in real numbers rather than assumptions. Michael’s practical approach demonstrates that mastering cash flow starts with diligent analysis, not just chasing the next deal.

Action Items

• Access the due diligence spreadsheet and print out the form.
• Fill out the due diligence form for up to 5 properties, either current properties or potential purchases.
• Transpose the data from the due diligence forms into the portfolio tracker sheet.
• Evaluate the performance of each individual property and the overall portfolio based on the data in the portfolio tracker sheet.
• If you have any property numbers you would like Michael to analyse, email them to him privately.