All that I can say is...I'm somewhat speechless. I don't think ANY of us really could have predicted or imagined how the last month has unfolded. Our lives practically changed overnight and we're all trying to adjust to a new normalcy in work, at home, socially, and financially. The industry I have a full-time job in has completely HAULTED, but luckily I'm able to keep my job and work from home right now. This is the time to practice gratitude and really appreciate the little things we take for granted. I hope you are all doing well out there!
With that, welcome to Jump In Real Estate's March 2020 portfolio update. Considering the events that have transpired I'm happy with how my portfolio is positioned because:
The biggest thorn in my side right now is dealing with a vacancy in my duplex, which sucks from a cash flow perspective, but really in the grand scheme of things there are so many more important things in life right now to worry about. Alright, so here's the report!
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 MARCH 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.
The past 6 months have been rather smooth for My Second Property. I'm hoping that either I'm getting lucky with no repair expenses popping up or my tenant is taking care of them himself. I REALLY hope my tenant is NOT ignoring any maintenance that needs to be taken care of, though. Getting into the theme of spending little money on repairs is great, but it always gets me thinking about any differed maintenance that isn't being spotted.
Gross Rents: $995
Property Taxes: $216.32
Property Management: $89.55
Income ($995) - Expenses ($719.79) = $275.21
Cash Flow from My Second Property: $275.21
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 vacant and the upper unit is rented to a young professional.
I'll just say it how it is...these past few months have been ROUGH for My Third Property. I had a tenant in the bottom unit move out in January and following a couple weeks of renovation (and bumping rent up to $895) it's still sitting vacant. A decent number of applications have come in, but you can imagine how things have just completely slowed down. A couple of promising applications are being stalled due to some employment verifications we're waiting on. My property manager and I are going to lower the vacant unit down to $875 from the original rate of $895.
Gross rent from Unit 1 (VACANT): $0
Gross rent from Unit 2: $875
Property Taxes: $221
Property Management fee: $87.50
Income ($875) - Expenses ($1,094) = -$219
Cash Flow from My Third Property: -$219
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. 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 I'm a Limited Partner and amazingly, we were paid out a distribution (albeit small) in December for Q4 of 2019 for the first time!
The positive news is that occupancy has increased from 50% at acquisition to 100% now! 59 of the 80 units have been completely renovated with 21 to go. 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 cash-flowing. 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: 1.5%
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 an additional $2.5 million into it over the next 24 months. Investor distributions are expected June of 2020.
It's been great to watch this investment move forward the past few months and get under control. I'm working with some amazingly experienced partners on this deal and I could not be happier. Units are constantly being renovated as we're still in the beginning stages of the reposition phase. Here are a few photos I snapped of our new BBQ area and dog park:
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. It was acquired for $10.3 million and we're investing another $3 million into it over the next 24 months.
As a member of the General Partner team, I'm working with the same individuals that I worked with on My Fifth Property. I flew out to Phoenix multiple times running due diligence, checking out comps, vetting the business plan/strategy, and connecting with investors.
This property is still in the very beginning stages of it's transformation having only closed on it less than 6 months ago. All roofs are being replaced and work has begun on the pool as you can see here:
Well, as I stated earlier, we are in unprecedented times right now. Most importantly, I hope you all are safe, healthy, and have positive attitude.
***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!