January 2021 - Portfolio Update
January 2021 = the start of a new year! New motivations, new plans, and new goals! I don't know about you, maybe it's just a mental thing, but the new year brings new energy for me and I can't wait to see what 2021 has in store.
So, onto the actual portfolio update! On the personal portfolio side of things (properties 1-3), all of my units are rented and occupied after I went through a little rough patch at the end of 2020. Surprisingly, all of my units are now rented on 24-month terms (2 year leases) which indicate that COVID might have prompted people to lock in long-term housing.
On the larger deals that I'm a partner/investor in, rent collections have still been down through COVID, but my properties in Arizona (properties 5 and 6) are well positioned with plenty of reserves. Unfortunately, the 80-unit in Louisville (property 4) is still running into issues, but I actually got a distribution (albeit small) this month. Finally, I invested in another multifamily property at the end of 2020. This is my 7th property and it's located in San Jose, CA which is less than an hour drive from my home. This is my first in-state investment!
More details below!
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 JANUARY INCOME. See how it performed HERE.
If you're looking to buy your first rental property and want to jumpstart up your education on the processes, procedures, and strategies, I'm writing an ebook that'll cover many of your questions. Check it out here: https://www.jumpinrealestate.com/jumpstart.html
My Second Property
I bought this single family house in March of 2018 in Indianapolis, Indiana. 2 Bed/1 Bath in a "B" Class neighborhood. It's currently rented on a 24-month lease.
I had a very clean and smooth month with this property to start 2021. No repairs or maintenance issues. Full cash flow received!
Gross Rents: $995
Property Taxes: $216.32
Property Management: $89.55
Repairs and Maintenance: $0
Income ($995) - Expenses ($728.79) = $266.21
Cash Flow from My Second Property: $266.21
My Third Property
I bought this duplex in July of 2018 in Indianapolis, Indiana. Both units are 2 Bed/1 Bath in a "B" Class neighborhood. Both units are on 24-month leases.
I was struggling with a vacancy in unit 2 for awhile on this property, but it finally got rented and the tenant moved in mid-January. I was able to get about half of the month in rent, which obviously hurt my cash flow numbers. But, bottom line: I'm glad to have this property back to 100% occupancy and I hope to take advantage of full cash from from here on out!
Gross rent from Unit 1: $875
Gross rent from Unit 2: $508.06 (pro-rated rent for new tenant that moved in)
Property Taxes: $221
Property Management fee: $138.30
Income ($1,383.06) - Expenses ($1,211.04) = $172.02
Cash Flow from My Third Property: $172.02
My Fourth Property
This is an 80-unit apartment complex in Louisville that I invested in passively through a company called Holdfolio. Unfortunately, things haven't gone as smooth as expected in this deal and Holdfolio is not hitting their underwritten timelines and budgets. It was acquired for $2.25 million and we're investing another $1 million into it as a group.
This is a completely passive investment for me as a Limited Partner and amazingly, we were paid out a distribution (albeit small) last December for Q4 of 2019 and I finally just got my second ever distribution from this property for Q4 of 2020 (also, very minuscule)
Occupancy is staying steady at 100% for now. There's excellent occupancy, but collections have been struggling as the resident base is largely service workers who have been hit the hardest by COVID. Luckily, the property cash-flowed last quarter but we're now officially paying principal on our loan (the first 2 years were interest-only), which hurts cash flow.
As a Limited Partner in this deal, there isn't much I can do except be patient and trust my partners to get this property turned around and continue to cash-flow. This was my first tip-toe into the larger multifamily world and although it's been challenging, it's been an eye-opening learning experience.
Total ROI since investing start date 10/11/18: 1.49%
My Fifth Property
This is a 164-unit apartment complex in Phoenix that I invested in passively. It was acquired for $19.75 million and we're investing an additional $2.5 million into it.
This continues to be a great investment and I'm working with some amazingly experienced partners on this deal and I couldn't be happier. Gross income was up, expenses were down, and Net Operating Income was up! I also got a distribution from this property for Q4 of 2020.
73 units have been renovated with another 3 being worked on right now. Here are a few photos of our new leasing office and completed gym.
My Sixth Property
This is an 94-unit apartment complex in Phoenix that a group of partners and I purchased and closed on at the end of November 2019. It was acquired for $10.3 million and we're investing another $3 million into it.
As a member of the General Partner team, I'm working with the same individuals that I worked with on My Fifth Property. As a General Partner, I flew out to Phoenix multiple times running due diligence, checking out comps, vetting the business plan/strategy, and connecting with investors. Distributions were sent out to our investors for Q4 of 2020. Cha Ching!
This property has now been under my partners' and my control for about a year now and we're really starting to see the fruits of our labor. All roofs were replaced, exterior is done, and the pool is pretty much finished. This was my first property as a General Partners and it's been a fun ride and transformation to be part of. Check out how our pool looks now below! And compare it to the above photo when we took over the property in 2019.
My Seventh Property
Here it is! The newest acquisition! And surprise, surprise, it's actually my first in-state investment. As you know by now, I've only ever invested in out-of-state markets being a California resident in one of the highest cost of living areas in the US. Well, the day is finally here...I invested in my market for the first time. I can literally drive from my home to visit this property in under an hour. CRAZY haha!
This is an 12-unit apartment complex in San Jose, CA that a group of partners and I purchased and closed on at the end of October 2020. It was acquired for $3 million and we're investing another $300,000 into it.
Current rents are about $1,200 per unit right now and after renovation we anticipate pushing them up to $2,100 per month. Value add baby!
With this being my first in-state investment, I decided to take a chance and give this whole California investing thing a try. With a lot of fear that residents are leaving California, sure, that could be a little risk. But, ultimately, I decided to take the chance, trust my gut, and I'm working with some amazing local partners on this deal. No way I could pass it up!
If you are interested in learning more about getting involved in deals like this and investing, you can reach out to me directly HERE.
After a crazy 2020, I'm am extremely excited for what 2021 has in store for all of us. Take this chance to write down specific goals for the year (personal, financial, anything) and then break them down into smaller goals that are more achievable. I've found this extremely valuable and it's helped me build my business and portfolio throughout the years. It's also important to re-visit your goals daily or weekly to make sure they're top of mind and you don't let them slip. Making progress in this business is simple, but not easy. Keep working hard 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. Keep an eye out for a BRAND NEW YouTube channel my good friend and I are launching soon :)