It's been a while my friends...I have to admit I've been slacking on updating this blog routinely. Maybe you've noticed. I really have been prioritizing life outside of work and real estate and that's shown with my lack of updates here. BUT, I just got reinvigorated to keep grinding and writing as much as I can. Soooo, here you have it. My latest portfolio update.
I had a number of exits from larger multifamily properties last year, my Indiana portfolio is still providing cash flow, and my partners and I are in the middle of a major rehab project (12 vacant units) in Sacramento where we are close to starting the lease-up process.
Let's dive into it!
My First Property
I bought this single family house in December of 2016 and SOLD it in May of 2018. 2 Bed/1 Bath in a "C" Class neighborhood in Indianapolis, Indiana. NO AUGUST INCOME. See how it performed HERE.
If you're looking to buy your first rental property and want to jumpstart your education on the processes, procedures, and strategies, check out my ebook below
My Second Property
I bought this single family house in March of 2018 in Indianapolis, Indiana for $86,000. It's a 2 Bed/1 Bath in a "B" Class neighborhood. I took care of a cash-out refinance last year when it was appraised for $154,000 and pulled most of my initial capital out. Even though cash flow isn't that great, my ROI is amazing!
This property really is the definition of "stability" as there rarely are any issues. My tenant is amazing, she cares for the property, and always pays on time. I raised rents slightly by 3% to $1,025 per month. BUT, my property taxes also increased significantly, dropping my cash flow...which isn't fun.
I can't complain though because this property was appraised for $154,000 and I purchased it for $86,000. I did a cash-out refinance last year and pulled most of my initial capital out, so my ROI is very high.
Gross Rents: $1,025
Property Taxes: $323.32
Property Management: $92.25
Repairs and Maintenance: $0
Income ($1,025) - Expenses ($868.25) = $156.75
Cash Flow from My Second Property: $156.75
My Third Property
I bought this duplex in July of 2018 in Indianapolis, Indiana for $158,000. Both units are 2 Bed/1 Bath in a "B" Class neighborhood. I also took care of a cash-out refinance on this property and pulled some of my initial capital out of the deal.
I was so happy last year when this property appraised for $174,000 (bought for $158,000) and I took care of a cash-out refinance. Similar to my single family home, however, property taxes went up! Also not fun! But, due to market conditions I raised rent in Unit 1 by 5.4% to $925 from $875.
Unit 2 has a lease expiring later this year and I anticipate raising rent to $925 as well...maybe a little higher as it's the upper unit and has a nice balcony in the back.
Gross rent from Unit 1: $925
Gross rent from Unit 2: $875
Property Taxes: $246.86
Property Management fee: $180
Income ($1,800) - Expenses ($1,182.32) = $617.68
Cash Flow from My Third Property: $617.68
My Fourth Property
This was an 80-unit apartment complex in Louisville that I invested in passively through a company called Holdfolio back in 2018. Unfortunately, things didn't go as smooth as expected and Holdfolio did not hit their underwritten timelines or budgets, but it was a great learning experience. It was acquired for $2.25 million and we sold it for $3.88M in August of 2021.
This was a completely passive investment for me as a Limited Partner and it officially sold in August of 2021. If you've been following me for awhile, you'll know this property had a lot of challenges. Unexpected expenses, low rent collections, and poor management plagued this passive investment run by Holdfolio. The best option was to sell and at least lock in a small return. I got about 5% return on my money in 2.5 years. Not the greatest...but again a very valuable learning experience!
Total ROI on this investment (exited in 2021): 5.22%
My Fifth Property
This was a 164-unit apartment complex in Phoenix that I invested in passively with trusted partners. It was acquired for $19.75 million and had a $2.5 million renovation budget. It was sold in 2021.
This property was officially sold and we exited this investment. I got a total of 50% return on my money in less than 2 years (22 months to be exact) and I couldn't be happier with the outcome. This was a deal I got into back in 2019 when I found amazing and experienced partners to work with.
Finding the right people to work with isn't easy; it takes time, commitment, and TRUST. Develop those relationships NOW and align yourself with people that are more experienced than yourself! That's the biggest business and money hack :)
Total ROI on this investment (exited in 2021): 50%
My Sixth Property
This was a 94-unit apartment complex in Phoenix that a group of partners and I purchased in November 2019. It was acquired for $10.3 million and our renovation budget was $3 million. We officially exited and sold this deal in August of 2021.
As a member of the General Partner team, I flew out to Phoenix multiple times running due diligence, checking out comps, vetting the business plan/strategy, and connecting with investors.
As far as the value-add went, all roofs were replaced, exterior painted, interiors completely renovated, and the pool was transformed. This was my first property as a General Partners and it was one of the biggest learning experiences I've ever been part of.
We sold this property in August of 2021 and it was frankly a "home run" deal after everything was said and done. Our location choice, execution of the value-add strategy, and great market conditions allowed us to provide our investors with a 100% return on their money in less than 2 years. In addition to investing my own capital on this deal I also had additional equity as part of the General Partner team.
Total Investor ROI on this deal (exited in 2021): 100%
If you want to learn more about how you can invest in deals like this with me, check out my investing company Jump Investments by clicking the link below
My Seventh Property
This is an 12-unit apartment complex in San Jose, CA that a group of partners and I purchased and closed on in October 2020. It was acquired for $3 million and we're investing another $300,000 into it. Current rents at acquisition were at ~$1,200 per unit (all 1 bed/1 baths) and after renovations we anticipate pushing them up significantly.
This property is still in the middle of being repositioned, it was acquired fully occupied, and tenant turnover has been slower than expected. We're close to having 50% of the units renovated and rented at market rate. Our latest rehabbed unit was leased for $1,850 which is a $590 increase from it's original rate.
If you are interested in learning more about getting involved in deals like this and investing you can reach out to me directly HERE.
My Eighth Property
This is an 12-unit apartment complex in Sacramento, CA that a group of partners and I purchased and closed on in September 2021. It was acquired for $2,630,000 million and we're investing another $350,000 into it.
It was purchased 100% vacant and in the great Midtown neighborhood of Sacramento where all the hip restaurants, bars, and coffee shops are. Super exited about this deal!
Working through supply chain issues and labor issues, the renovation on all 12 units is nearing completion! We anticipate the 1 bedroom units renting for $1,925-$2,000 and the multi-level townhomes renting for $2,395. Once all 12 units have been completed we'll begin the lease-up phase immediately and get to work on the exterior!
If you're interested in learning more about getting involved in deals like this and investing you can reach out to me directly HERE.
With a VERY BUSY 2021...2022 has been a lot more relaxed for me on the real estate front. As I mentioned at the beginning of this update, I've been prioritizing travel and quality time with family and friends while my real estate portfolio keeps chugging along. BUT, I definitely feel that it's time to get into another deal soon so my partners are on the lookout :)
Even with an uncertain economic outlook and market, I always say, JUST START and take action. Give real estate time, have a positive attitude, never stop networking, and you stand to do very well in this world.
Best of luck everyone and reach out if you ever have any questions!
***VERY IMPORTANT NOTE: even if I'm bringing in positive cash flow after all my expenses are paid, I'M NOT TOUCHING any of it! This income goes toward my next investment and any future expenses. I have a day job and side hustles to cover my lifestyle :)
If I ever get to the point where I actually want to take the cash flow, I would still only take about half of it and save the remainder for future expenses. This is SUPER IMPORTANT! ALWAYS factor in future vacancy/repair/maintenance expenses. Make sure you know how to properly calculate cash flow HERE.
Let me know if you have any questions!
P.S. Take a look at the Youtube channel I started with my friend: REAL ESTATE INVESTING REAL TALK