January 2019 - Income Report
Welcome to Jump In Real Estate's January 2019 rental income report! After a rocky end to 2018 with negative cash flow, things turned around in January. Sorta. Cash flow was positive, but a TREE BRANCH fell on one of my properties. Yeah....that sucked....
Now, I have a delayed expense for this repair. Because I couldn't have work done to the roof with the freezing cold weather engulfing the midwest right now. My property manager and contractor patched it up and the tenants are fine, but like I said, work won't be done until February. Check out the full report 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 JANUARY 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.
Like I said, a freak branch fell on my roof! The lesson here? When buying a property, take note of the surrounding trees and branches. It's always good to assess pro-active trimming of any branches that are too close to your property. I've always been aware of the risks of tree branches falling on my roof, but I never really thought it'd realistically happen to me. Because work has not started on my roof, I did not account for any repair expenses in January. Repairs will take place in February.
Gross Rents: $995
Property Taxes: $216.32
Property Management: $89.55
Income ($995) - Expenses ($696.62) =
Cash Flow from My Second Property: $298.38
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.
Pretty clean month, but I didn't make it through 100% unscathed. I had a couple small repairs to take care of and it cost me $200 to send someone out:
-There was a little water at the bottom of Unit 2's water heater pan. Inspected, but no leaks found.
-There wasn't electricity going to the garage door openers. They are now operational.
Gross Rents: $1,725
Property Taxes: $221
Property Management fee: $172.50
Income ($1,725) - Expenses ($1,308.36) =
Cash Flow from My Third Property: $416.64
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.
Not much to report here. We bumped up occupancy from 50% to 55% in the first few months and we're seeing rental demand is pretty strong for these units. We're in the process of rehabbing 23 vacant units and broke ground on another 10 in January. 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.
FULL PORTFOLIO CASH FLOW: $715.02
January was a reminder that freak accidents will happen when owning real estate. Always have cash reserves to take care of issues that pop up. And be aware of trees surrounding your investments. Pro-active trimming is a good idea :)
***VERY IMPORTANT NOTE: even though 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!