Hi Villanelle,
Again I apologize for expenses that were forgotten or miscalculated. As I stated previously I am in the process of overhauling the budget, using previous actuals as well as budgetary goals based on eliminating and reducing expenses. I'm not sure how much more accurate I can get at this point. I've seen other budgets posted here that are missing line items and that have estimates; I didn't realize that this was a requirement for posting here so my apologies if I missed that.
In any case, I own 19 units. These units are in 6 properties. The properties have anywhere from 2 to 5 units each. We are also 50/50 partners on 4 of the 6 properties. Each unit cash flows over $200 per month, which is the standard we had established when we first started investing and which is also the number that is recommended by other investors and resources like BiggerPockets. The rentals cash flow very nicely. I'm not sure if you're not understanding the above details, or if you think $200+/unit per month strict cash flow is not worth it. We put 30% of the gross monthly rents aside for maintenance, turnover, capex work, vacancy every month and distribute the remainder to the investors.
Definitely no need to apologize. I'm not harping on it to shame you. I'm trying to get you to see that your numbers don't make sense and that until you sort that you, you probably can't solve your underlying problem.
If each unit is cash flowing $200 per month (is that your share on the joint units, or total?), then 19x$200=$3800/mo, which would be $45,600 per year. But that is far less than the number you listed in your budget. (You said $3000/mo, or $36,00 per year. So there is a roughly $10,000 discrepancy there. Also, depending on the total you have invested, $45k in returns may or may not be good, but it's definitely better than $36k
You have over a million dollars in property (between you and the other investor; That is bringing in about $150k in rent annually, assuming few vacancies. Yet you end up with only $36,000 (or maybe $45,000 )in rent.
So:
Property #1: purchased for $115k, worth $150k, gross rents $2,400/month
Property #2: purchased for $254k, worth just about that but could sell for more in this market, gross rents $3,330/month (
Your half is about $130k, gross rents are $1665)Property #3: purchased for $100k, worth $120k, gross rents $1,750/month
Property #4: purchased for $135k, worth $150k, gross rents $2,350/month
(Your half is $67.5k, $1175)Property #5: purchased for $196k, worth $250k, gross rents $2,750/month
($175k, $1375)Property #6: purchased for $109,500, worth $125k, gross rents $2,000/month.
($62.5k; $1000)We are 50/50 partners on properties
#2, 4, 5, 6. Let me know if you have any other suggestions? I really appreciate your guys' responses.
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Current value of your properties (though I'm not factoring in transaction costs if you sold) is $705,000. Your gross rents are $9365/mo. So you are grossing $112,000, yet net is $36/45k. Where is the rest of that going? And, let's say your new number of $45k is correct (in which case you can adjust the budget and that buys you 5 figures of space annually!!). Are you good with a $45k return on $705,000? 45k/705k=a roughly 6% return (not factoring in equity growth). That's... fine. But given the work you are putting in to managing 19 properties, it seems like a poor choice.
Do you see why I'm questioning your numbers? Either 36 or 45k, don't seem to make sense if you are collecting $112,000 in rent. For each of your six properties, are you actually spending nearly $20k per year? Maybe you are, but given the wiggle in your numbers, I have to question it. And if that is in fact accurate, why not just sell, take all that off your plate, and get nearly the same results in the stock market, which requires almost no work at all? Or at least sell all but your 2 most profitable properties?