Cash flowing properties in Phoenix

[Daniel Pitner]

Hello fellow Phoenix-area investors! What are you averaging for cash flow on your properties?

[Kyle Benham]

Background: New REI, purchased my first investment property this past Spring

- 4 unit complex (2 BR, 1 Bath, 720 sq ft each)

- All expenses approx $2075/month (principle, interest, insurance, taxes, water, sewer, rainy day fund monthly addition, online tenant pay platform)

- C-/D type property, slowly renovating to B class

- Rents at purchase: $625, $625, $685, empty

- Current Rents: $675, $675, $715, $900

I have had my share of expenses (learning opportunities) as I am doing a full renovation on a property that had a ton of deferred maintenance, but it was what I was targeting. I renovated the empty unit at closing helping increase income immediately and the exterior is about 60% done now, just need to do the curb appeal aspects and re-foam the roof. 2/4 air conditioners replaced. So its been a busy first 5 months, but my cash flows have been approx $420, $50 (unexpected roof issue), $620, $440, and this last month my best yet, $890 (rents went up).

I am obviously very inexperienced and have learned some good stuff like due diligence and paying for better inspections which probably would have helped me negotiate a lower purchase price, but overall the experience has been positive and I like where it’s heading. I still have 3 units to renovate and in the next year that should only increase my cash flow and decrease my expenses, as any maintenance expenses come out of that difference between gross rents and known expenses, the rainy day fund does not pay for month month maintenance issues, it just accumulates for large items like water heaters, roof issues, big plumbing issues, or AC unit replacement.

I look forward to hearing from others and learning how I can improve from their information and experiences.