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Welcome to Jump In Real Estate's February 2019 rental income report! WOW. What an expensive month :( I knew this was coming. And it finally hit the expense line. I took care of the somewhat major crawlspace issue at My Third Property. If you recall, when I bought the property, there was standing water in the crawlspace. I had a mold inspector verify this wouldn't be a huge health-issue, but I still had to find and prevent the water issues. Was it a foundation thing? Was it grading of the backyard? Was it leaky plumbing? 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. NO FEBRUARY INCOME. See how it performed HERE.  My Second Property I bought this single family house in March of 2018. 2 Bed/1 Bath in a "B" Class neighborhood. It's currently rented to two medical students on a 12-month lease.  Little repairs add up. This month, I had some clogged up pipes to the washing machine, which required a plumber to take a look and repair them ($165). On top of that, the laundry room door kept jamming up, so I had someone go out there and replace it ($95). All in all, it was a positive cash flow month which is awesome!....but, I only brought in $38.38 after all expenses. Still, cash flow is cash flow! Income Gross Rents: $995 TOTAL: $995 Expenses Mortgage: $346.25 Property Taxes: $216.32 Insurance: $44.50 Property Management: $89.55 Repairs: $260 TOTAL: $956.62 Income ($995) - Expenses ($956.62) = Cash Flow from My Second Property: $38.38 My Third Property I bought this duplex in July of 2018. Both units are 2 Bed/1 Bath in a "B" Class neighborhood. The lower unit is currently rented to a young married couple and the upper unit is rented to a young professional.  Fingers crossed, this is my last MAJOR repair for awhile... My crawlspace water issue is now officially fixed. And with that, came a hefty $6,000+ expense. FUN. TIMES. But, this is the nature of being in real estate. And another big reminder to always have plenty of cash reserves ready. So, all in all, I have a new drainage system in the crawlspace, and repaired the rotten and damp joists.
Income Gross Rents: $1,725 TOTAL: $1,725 Expenses Mortgage: $654.36 Property Taxes: $221 Insurance: $60.50 Property Management fee: $172.50 Repairs: $6,565.98 TOTAL: $7,674.34 Income ($1,725) - Expenses ($7,674.34) = Cash Flow from My Third Property: -$5,949.34 My Fourth Property This is an 80-unit apartment complex in Louisville that a group of partners and I purchased. It was acquired for $2.25 million and we're investing $1.05 million into it over the next 7-9 months. Cash flow isn't expected until July of 2019.  We were able to bump occupancy of this property up to 63% (up from 50% when acquired) and we're seeing rental demand is pretty strong for these units. Our biggest focus is to get these vacant units fixed up and rented to drive occupancy. Cash flow is still not expected until Q3 of 2019. Below are a couple photos of the renovations in progress.
FULL PORTFOLIO CASH FLOW: -$5,910.96 I say this all the time, but ALWAY, ALWAYS, ALWAYS have reserves to pay for unexpected repairs, and always keep part of your cash flow for future expenses as well. Bottom line: have cash in your back pocket ready to be deployed for emergencies.
It's going to take some time to make this money back, but I'm playing the LONG game and am not concerned right now. Yes, it's concerning to drop this kind of money, but I'm always evaluating and assessing the investment. ***VERY IMPORTANT NOTE: even if I brought in positive cash flow after all my expenses, 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! -Tyler
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