I’m behind on the Cash Flow Statements, and I apologize for that. Also, I need to get around to writing a trip report for each of the countries I visited during my vacation, so expect a lot of new updates soon!
The results are presented “as is” for each month. If something breaks and I need to spend money on repairs, those charges will show up as an expense for the corresponding property. If there are no issues, no expenses are reported. So, although I do set aside a portion of the net income for vacancy and maintenance reserves (which will inevitably happen), I don’t account for them in this report.
Here’s the report for July:
Rental Property #1: Bay Area
Rental Property #1 has been, and continues to be a top performer. The current tenant still has another year to go on her lease, and is quickly approaching two year’s tenancy. That’s so awesome! I would love to keep her around, as things have been going really well so far. I was able to collect full rent, on time again this month.
Total cash flow for the month was $447.67.
Rental Property #2: Bay Area
Similar to Rental Property #1, this property also keeps on trucking along. I have a wonderful tenant here, and they continue to pay rent on time each month. I also would love to keep this tenant around for the long haul.
Total cash flow for the month was $344.76.
Rental Property #3: Chicago
The first floor tenant (market rate) is a gem, as she continues to pay on time without incident. No news to report here! She even paid a $25 late fee since rent arrived slightly later than usual this month. It isn’t my primary interest to collect late fees, but I do appreciate the fact that she takes the rules seriously. I’m not so cutthroat when it comes to landlording, so I’ll most likely return the favor by giving her a gift card at the end of the year. She is a great tenant, after all. I like to return respect with respect.
The second floor tenant (Section 8) chipped in $200 this month in rent. That was rather unexpected, since she is usually delinquent, so I’ll gladly take it. However, I was hit with $922 in attorney and legal fees this month. Ouch! That hurts a lot, I’m not going to lie… Nor will I even attempt to sugarcoat it! The fees were a consequence of my decision to start the eviction process and get a new tenant in the second unit. Enough was enough…
When running cash flow numbers, I originally budgeted 10% of monthly cash flow towards vacancy reserves. I will learn from this experience whether or not that percentage is adequate or not. My guess is that 10% is insufficient (especially for out-of-state investing in Cook County), and I’m anticipating the entire eviction costing me a lot more than that… More clarity (and answers) will come as I navigate through this eviction process.
My first negative cash flow month in Chicago!
Total cash flow this month for Chicago came out to be $32.31.
Rental Property #4: Indianapolis
Rental Property #4 has started to stabilize and I’ve been able to collect rent on a consistent basis again. Let’s hope the trend continues as I can only deal with so many headaches at any given time… So far, this new tenant seems to be quite good, as she has been paying on time without incident. I am crossing my fingers, moving forward.
Total cash flow this month for Indianapolis came out to be $518.18.
Rental Property #5: Chicago
The first floor tenant is Section 8, and her portion is only $110. Section 8 covers $1,098, or the majority of the rent. Finally, this tenant got her act together this month and started paying rent again! Unfortunately, this wasn’t on her own accord, but because of a legal document we sent her early in the month informing her of a pending eviction. The legal notice set me back $65, but it worked in getting her attention! She pitched in $480 in rent this month, so she’s just about caught up. There is still a minimal balance, but great progress was made this month, and I’ll take it.
The second floor tenants are market, and they are excellent. I collected rent on time and they even paid the $25 late fee. Similar to my market tenant in Rental Property #3, rent was collected this month, but it arrived after the 5th of the month, which is when the late fee automatically gets inputted into the online payment system.
After all expenses, total cash flow came out to be $1,499.94.
Total cash flow for July came out to be $2,778.27. I was unable to clear $3,000/month, which was expected since I’m battling an eviction right now in Chicago. This experience just further hammers home the importance of selecting the right tenants! I was fortunate to be able to surpass $2,000 this month (mostly due to delinquent tenants catching up on payments), but I am not taking these results lightly. Quite frankly, I need to stabilize the second floor unit of Rental Property #3… In the coming months, readers will see first hand how costly (and painful) an eviction in Chicago really is… I’m hoping for the best, but am definitely planning for the worst. Hopefully, brighter days lie ahead.