How Much Cash Flow I Make Owning A 44 Unit Apartment Complex (FULL BREAKDOWN)

I am going to break down how much cash flow my partners and I make on this one 44 unit apartment complex. This is a multifamily property we acquired for $2.4 million using none of our own money. And we were able to increase the value through forced appreciation all the way to $3.8 million, creating $1.2 million in equity within just 15 months. In this video, we are not just sharing projections or vague numbers. I am actually going to show you the profit and from last month. Then I will show you how much of it goes to our investors and how much of it is ours to keep. If you're considering getting into multifamily, maybe you own a few single family properties or maybe you have zero experience in real estate. That used to be me. I used to watch these videos and try to figure out what can I really expect acquiring a building like this. But now I have the receipts and I'm going to share them with you right now. So let's dive in. I have a copy of the T12 right here, the trailing 12 months. It breaks down the income and expenses for the year. And if you want a copy of that, let me know. But what I did was I broke it down on this whiteboard. Gross income that we collected on this property last month was $52,000. Okay, just last month. Now annualized over the past 12 months, it was $612,000. So average of about $51,000 a month. Now that includes your pet fees, your base rent, your delinquency fees, all the things like that, your utilities, renters pay back a portion of that. That's what that includes. Okay? Now most people stop here and say, alright, your gross income minus your mortgage is your cash flow, right? Or they think of a few expenses and they think that's my cash flow. There's a lot of expenses that we got to account for before we look at what our actual profit was. Okay, so property management was 4% of the gross income income, alright? So that's going to vary each month depending on how much we collect. But we also add $2,333 per month on a flat fee for payroll. Now this is in house property management, not third party. Okay? That's a total of about $4,374 per month in property management, marketing, $176 per month. That obviously includes your listing fees, advertising vacancy cost, all that kind of stuff. Okay, so $176 per month maintenance last month was a very low month. All right, so $707 last month. However, maintenance goes up and down. The average is typically on this property, $2,451 per month. Alright, insurance, so commercial property insurance is $3,898 per month. Taxes $4,333 per month. Those things are typically rolled into. It's on top of the debt payment and held in escrow. Okay, so those things are still a part of the expenses, but they're paid through the debt. Alright, utilities. $5,000 per month in utilities. That's after our renters paid back a portion of that around 1500, I believe 3000 somewhere around there. Repairs. Alright, so this is one of the biggest variables that goes up and down every single month. But your things like H Vac, your general repairs, electric, rental turns, all those different things for this Property, it's about $3,728 per month. So your total expenses are $24,000 per month average. This past year, I believe last month was around 19,000, so. But average 24,000 in expenses. Now what we have is our total income is $51,000 per month. Total expenses 24,000. Our NOI, our net operating income, what we have left over after expenses is 27,000. This is the big number right here, what our property is valued based on. And I'll say this is a pretty good number, but it could be a lot better. With this specific property. We plan to do major improvements with operational efficiency and different things like that, which I expect to see that number come a lot higher. However, to give you a comparison, when we bought the property, it was around $17,000 on the NOI. So we were able to increase it about $10,000, which is roughly 60% increase through forced appreciation. Alright, now the mortgage on the property, what we pay for the debt service on this property is $12,157 a month. Alright, so this is before debt, before investors. Now we have to pay the $12,157. That doesn't include your insurance and taxes, but it's escrowed in on top of this number. But the mortgage by itself, 12,157. Now remember, we raise capital for this deal using other people's money. So we have investor partners who get paid first. Our investors get about 10% preferred returns annually. We pay that out quarterly. However, we refinance this property after about 15 months, paid them back half of their $500,000 that they used for the down payment. Now we pay them only on what money they still have in the deal. Alright, so that's about $2,000 per month off the top. Okay? They also own 10% of the equity in the deal. So they get about 10% of the $1.2 million we created in equity within 15 months. And now that value is about $1.6 million more than they have 10% of. So their part is $160,000 on top of the preferred returns. They get that when we refinance or sell. They also get 10% of the cash flow month to month. So in this case, they get around $1,500 per month. After investor payments and debt, we now have $11,000 in cash flow for the general partner. That's us. Okay? Now we can put that in our pockets or. The real reason people get into these types of deals, one is the tax benefits, right? Which I'll go over that in a second. But number two, and most importantly is we own 90% of the $1.6 million in the equity that was created, which is about $1.4 million. We can then either take through a sell or refinance it and put it into another property. So yes, the building cash flow is $27,000 total. But after we pay our investors their preferred returns of debt, we're keeping about $11,000 as a general partnership. However, remember, we created this but didn't bring any money to the table. We had investors who ended up getting a 30% annualized return once we refinanced in 15 months. And really, you can't even calculate that number because they're getting 10% of the cash flow as long as we own the property in perpetuity. So here's what we did differently, okay? When we first acquired this property, the NOI was about $17,000. Alright? What we did was, number one, we created forced appreciation, which means we came in and improved the NOI. We increased income, decreased expenses, and we have a $324,000 NOI today. We paid $2.4 million. NOI is 324, cap rate 6.5%. That means that the cap rate divided by your NOI gives you the value of your property, which today is 4.2 million. Alright? So that's an equity created of $1.8 million. Alright? Number two, tax benefits. This is a major deal for anybody who's coming in, whether it's limited partners, your investors, or for you as a general partner. We were able to take off a 2.4 million dollar property, a $500,000 tax write off. Okay? So that can offset a lot of your taxes that can make a major dent. And really for a property that's four or five million dollars, like some of our other properties, we were able to take a one million dollar tax write off on these properties, okay? And then you have your debt pay down. So every single month, part of that mortgage is your principal and you have tenants paying off the debt every single month. So cash flow is the cherry on top, right? The real wealth is in the equity, the tax benefits and the appreciation. Now you might think a property like this is out of reach, right? 44 units, $2.4 million purchase price, raising capital from investors, managing operations. You might be thinking that's great for you, but I don't have those kind of connections. I don't have the experience, I don't have. I don't even know where to start. But here's the truth, okay? Neither did we when we started. We didn't have rich friends, we didn't have a database of investors ready to write checks, right? We had to learn how to find these deals, how to structure them and how to raise capital. Alright? And that's exactly why my partners and I created REI Accelerator Community. If you are serious about doing this, if you want to buy your first multifamily property and stop sitting on the sidelines, we want to make it easy for you, okay? Click the link below and see how we help investors. Just like you find off market properties, fund those properties and get them to the closing table on your first deal within six to nine months. Alright? Here's how we assign you a dedicated lead specialist who helps you find off market deals. They generate seller leads, qualify the properties and get you in front of sellers, all right? You don't spend 40 hours a week cold calling, they handle that. We give you the exact capital raising system. We use the same system that helped us raise millions for deals just like this without using our own money. You'll learn how to attract investors, structure deals and close with confidence. All right? So just click the link below and if this breakdown helps you drop a comment, let me know. Subscribe for more real world multifamily content. All right, see you soon.