Welcome to Jump In Real Estate's July 2019 portfolio update! First of all, I'm moving away from calling these INCOME REPORTS because, as my portfolio has become more and more complex (ie I've invested in 2 large multifamily assets as a limited partner), it becomes very difficult to report income with so many moving pieces. Also, for confidentiality reasons, I'm choosing not to report everything with so many partners involved in some of these deals. If you want to learn more, always feel free to contact me directly HERE.
SO, the big news...I invested in MY FIFTH PROPERTY as a limited partner. This investment is a 164-unit property in Phoenix where I partnered with very experienced and proven operators. I'm SUPER excited about this one, because I completely trust the people I'm working with. This is similar to My Fourth Property in that it's a passive investment where I'm given equity in the asset in exchange for my investment.
As I've gotten older I've become more and more conscious of the value of time. Why have my last two investments been passive multifamily investments as a limited parter? One word: TIME.
Yes, I could continue to slowly build my portfolio one duplex at a time, but at least for now, I'm valuing the passivity of my last 2 investments and will always be flexible and open to new strategies.
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 JULY 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 on a 12-month lease.
As mentioned last month, I had a tenant move out on June 8th (I had them pay a full months rent) and a new tenant moved in on June 28th. That means I had to pay a $895 new lease fee. These fees are pretty standard in the property management world, so you'll learn to expect them. It sucks having to pay $895 for a new tenant, but, it is what it is, and I'm happy to have another 12-month lease in place!
Gross Rents: $995
Property Taxes: $216.32
LEASING FEE (one-time fee for new lease): $895
Income ($995) - Expenses ($1,525.24) = -$530.24
Cash Flow from My Second Property: -$530.24
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.
Some of you already know, but I visited Indianapolis in July! It's part of my plan to visit the market once a year, to check up on the portfolio, connect with my team on the ground, and re-evaluate the market. Welp, when I was out there in July and drove by this investment, I noticed something wrong...there was a HOLE in the siding right by the roof. So, about $1,000 later...it's fixed, after putting a nice dent in my July cash flow.
Gross Rents: $1,725
Property Taxes: $221
Property Management fee: $172.50
Income ($1,725) - Expenses ($2,334.24) = -$609.24
Cash Flow from My Third Property: -$609.24
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 distributions aren't expected until Q4 of 2019.
Occupancy has increased from 50% at acquisition to 78% with 10 new residents moving in during the second quarter. The goal is to be over 90% by Q4 of 2019 when we're expected to receive our first distribution.
My Fifth Property
This is a 164-unit apartment complex in Phoenix that a group of partners and I purchased. It was acquired for $19.75 million and we're investing $2.5 million into it over the next 24 months. Investor distributions aren't expected until June of 2020.
It was a BUSY month as every property in my portfolio saw some action. My single family got a new tenant, my duplex needed some repairs, my Louisville property saw occupancy levels rise, and I invested in My Fifth Property!
***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!