September 2014 Cash Flow Statement


I’m falling behind on the updates again, and for that I apologize (again!). Ever since I started the new job, I am finding that my free time is now more limited than ever before. And after staring at a computer screen for 10-12 hours each day, it’s been a challenge finding a way to fit in more computer time for blogging. Usually by the end of the work day, I just want to rest my eyes and/or exercise and sleep.

But I don’t think these tough times will last indefinitely. I’m still the “new guy” at work, so I’m putting in the extra effort needed to establish myself. When the time is right, I will taper back a bit and aim to find a better work/life balance ratio.

Let’s get to the September cash flow update!

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 September:


Rental Property #1: Bay Area

Rental Property #1 has now been occupied by the same tenant for over two years! Things are going excellent here, and we have a win-win situation. I have yet to raise the rent, and the tenant keeps on paying consistently on time each month. With the cash flow being what it is, I have no complaints at all. This arrangement is working out well for both parties. 🙂

Total cash flow for the month was $447.67.

Rental Property #2: Bay Area

Similar to Rental Property #1, this property also keeps on performing. The current tenant has occupied the property for about a year and a half now. The cash flow from this unit isn’t as strong as for Rental Property #1, but it’s decent for a Bay Area rental. So far, so good; I”ll gladly trade some cash flow to have a solid, low hassle tenant in place. Another win-win situation here.

Total cash flow for the month was $344.76.

Rental Property #3: Chicago

The first floor tenant (market rate) paid on time this month, per usual. She paid towards the end of the month, so she was courteous enough to chip in an extra $25 late fee.

The second floor tenant (Section 8) is being evicted, but even she managed to contribute $301 this month. This is in addition to the CHA payment, which came in slightly lower than normal at $657. The annual CHA inspection took place this month and the second floor unit failed inspection. This is why I was hit with a $75 inspection fee, and because the unit failed, it was under abatement for a few days. Instead of collecting the normal CHA subsidy of $857, I lost out on rent for a few days… The PM did their best to resolve this issue ASAP, but unfortunately, they can only do so much as CHA ultimately determines when the next inspection will take place… and when the issue has been fully resolved. Like most things government, things don’t get done quite as quickly as you would like…

Other expenses this month were for utilities ($78.70) and for inspection repairs ($45.84).

Total cash flow this month for Chicago came out to be $599.07.

Rental Property #4: Indianapolis

Rental Property #4 underwent some changes this month. At the beginning of the month, I received a notice informing me that the PM was being re-assigned to a different PM company. After digesting the e-mail, I realized that one of my worse fears was becoming reality — The tunkey company that I had been working with was bailing out!

Well, I can’t say I was too happy with this piece of news… But I guess that’s one of the risks you take when investing out-of-state, and especially when trusting a turnkey company! Regardless of what a turnkey company tells you (or anyone else), it’s NEVER certain that they will be around for the long haul. If you’re considering investing out-of-state, this is a reminder of the extreme importance of purchasing a quality property! In this case, I believe Rental Property #4 is located in a solid neighborhood and should have little trouble securing a good tenant, regardless of the PM company I have in place…

The new PM company scheduled to take over announced that they would reduce management fees from 10% to 8%. Still, I was left feeling apprehensive about the whole turnover. The new company coming in was also a huge operations, as they manage many properties in various states.

After much deliberation (and pondering back and forth), I ultimately decided to pull out of my agreement with this incoming new company, and I decided to find my own PM. I received a recommendation from a local investor, and effective October, I will be entrusting the PM services to a much smaller, local company. They will keep the PM fee the same as I was paying previously, 10%.

Total cash flow this month for Indianapolis came out to be $518.18.

Rental Property #5: Chicago

Both tenants paid on time this month and Rental Property #5 seems to be doing well, overall. It’s still early in the game, but I’m glad to see that this property is producing solid cash flow again this month. There were no maintenance or vacancy issues, as is to be expected for a turnkey property just getting started.

After all expenses, total cash flow this month was $1,098.34.


Total cash flow for September came out to be $3,008.02. I barely cleared $3,000 this month, in part due to Rental Property #3 Unit 2 being under abatement for a few days. Further, there were a few maintenance items and a CHA inspection bill to pay this month.

Starting November, Rental Property #3 Unit 2 will be vacant, as the eviction process comes to completion. I’m a bit anxious to get over this hurdle, as I am not yet certain how long it will take for me to secure a new tenant. In addition, I have to worry about some more attorney fees, rent-ready, and leasing agent fees. It’s not going to be a pretty sight, and all these fees are going to eat at the bottom line. But hopefully I can secure a quality tenant this time around!

Rental Property #4 will also be under new management starting next month… There’s a lot of change in the air as we enter the fall season. I can’t say it’s ideal, but it’s real estate, so it kind of comes with the territory. It’s always the dream to be firing on all cylinders, but I knew going into this that there would be some speed bumps along the way.

I’m still learning how to navigate through them, but the end goal of early FI remains the same.

Fight on!

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5 years ago

Another good month! I’m dealing with the same changes w/Indi, but will likely stick with the new company. I can definitely see the benefit of going with a new, smaller third party though. Maybe we can email about the pros/cons after a few months w/ the new options. Cheers!

Mrs. Bug
5 years ago

Hello! I recently found your blog and really enjoy it! I have been toying with the idea of investing in a rental property but haven’t taken the plunge yet. How do you know when the time is right to purchase? Any regrets from your rental purchases? Thanks for sharing!

No Nonsense Landlord
5 years ago

The joys of Section 8…. Hopefully the tenant actually gets out, and I am surprised that she is still paying. I am not sure if I would have went with the small company, or the large one. Lower fees are great, and a cookie cutter process is good too. The downside, every little thing would cost something, maybe even a phone call. Why didn’t the PM company in CHI do a pre-inspection? Was the repair something missed from the first go-round? Or was it tenant damage? Or just wear and tear. It might be an indicator of who should pay… Read more »

5 years ago
Reply to  FI Fighter

Is the Los Angeles market comparable to SF? Would it be worth investing in that area? Maybe it will be less hands on? Just thinking “outloud”.

5 years ago

Sounds like you’re much more hands on than you would originally have desired when starting this journey. While things are still cash flow positive, the level of work required is certainly higher! If you had to do it all over, even so early into it, would you have undertaken some of these properties, or would you gone with some higher grade investments with slightly less cash flow? How do you see your experiences here impacting your future investing decisions?

Will you be including your 25% share of the two latest “speculative” investments in the Bay area?

5 years ago

Lots of work and concerns with your properties but the $3.000 are useful to build up an emergency fund, I guess.

A Frugal Family's Journey

Great Month! Gotta love all that green on these cash flow statements. 🙂 Keep up the great work.

Wishing you continued success on your personal journey! AFFJ

5 years ago

I have one rental property which cost me $390k and I have it on the short term vacation rental market in Naples Florida. Rent varies from $1500-$2000/week depending on the season plus we charge for pool and spa heating, exit cleaning and state taxes. Gross income this year is over $60k with total expenses including mortgage interest, taxes, insurance, management, utilities, cable/phone/internet, landscaping, etc. coming in around $25k. The nice part is we also use the house 4-5 weeks a year and love it here. Total time investment is pretty minimal since my PM company pays all my bills and… Read more »

5 years ago

Wow 5 rental properties all over the country. That’s really impressive. Sounds like there’s a lot of work involved in managing these 5 properties. That’s too bad it’s more than what you originally anticipated. Hopefully by hiring the right management company you can reduce the amount of workload on these rental properties.


[…] (at least on paper). With the fifth rental property secure, I soon saw my cash flow statements rising to $3,000/month in net income, when all units were firing on all […]


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