1st Rental- 3 Year Update

[Justin Ruholl]

Three years ago, at the age of 18, I partnered with my parents on our first single-family rental. I found this property on the MLS, after falling out of contract last minute due to buyers financials. My parents took out a HELOC loan on their house, and I managed the property with a 50/50 profit split. Our first tenant stayed for 2 years and 8 months, and we've just recently moved in a new couple. We plan to remove the carpet next year and install LVF to increase property's value and potentially bump the rent. I wanted to share the financials after 3 years, and demonstrate what three years of real estate investing can achiev

3 Bed/1 Ba Single Family Pro-Forma:

Year 1 (2021)

Income:

Rent: $1,200.00

Expenses:

Mortgage: $509.95

Taxes: $119.10

Insurance: $43.84

Cap Ex: $60

Repairs/Maintenance: $60

Vacancy: $60

Monthly Cashflow:

$347.11/mo or $4,165.32/yr

Year 3 (2024)

Income:

Rent: $1,300.00

Additional Pet Rent: $75

Expenses:

Mortgage: $509.95

Taxes: $155.43

Insurance: $53.03

Cap Ex: $68.75

Repairs/Maintenance: $68.75

Vacancy: $58.75

Monthly Cashflow:

$450/mo or $5,400/yr (Total/Not 50/50 %)

Total Equity: $37,473.88

-Principal Equity: $7,959.62

I have learned a lot about the systems needed in place to run a rental property, and how important picking the right tenant is.  I am going to purchase a 2-4 unit property to house hack, or seller finance up to 10 units (Depending on which financing works best) by the end of this year.  I have put better systems in place after reading  Brandon Turners book on managing rental property's, which has given me the confidence to dive into multifamily.  My strategy will be off market owner calling for meetings, and building relationships with as many owners in my market as I can.