I'm getting my butt kicked

[Nic S.]

I grossly underestimated maintenance and make ready costs for my KCMO portfolio. Operating costs are through the roof and net income is non-existent in my first year of business. 

I started with 2 SFH turnkeys which have performed well but then I bought 3 duplexes that are crushing my cash flow. All properties had a 3rd party inspection but between evictions, capex costs, and turnover costs my business will be losing money in 2020.

I think I scaled too quickly. 1 unit total in 2019, 7 more in 2020 for a total of 8 in <12months. I underestimated the amount of reserves I'll need to ensure my portfolio pays for itself. 7 of the 8 properties exceed the 1% rule and appreciation is happening in KCMO. 

I keep telling myself its 'a long game' but it sure feels like I'm doing something wrong. 

I'm on writing this to share my personal experience, these are fantastic lessons I'm learning but it wasn't how I envisioned year 1 going.