Memphis Rental Property #25
This is the last property in a wave of acquisitions in my portfolio in the winter of 2022-2023. This one closed in January 2023, and as I mentioned in the Property #24 spotlight, it’s the twin sibling of that property. Please check out that article for all the details on this condo development, and why I decided to purchase these two units.
There’s not much more to say about Property #25 here, because it’s truly identical to Property #24: same backstory with the condo development, same financing, etc. — in fact, it’s the same exactly 2 bed/1-bath layout, with identical finishes.
The only difference is the numbers, because by the time I purchased this second unit, the turnkey provider had raised the price from $70,000 to $80,000. There was strong demand from his investor base for these units, so he decided he could get more for them — which is fair game, of course. But I still liked the numbers at $80,000, so I went forward with it anyway.
I’ll summarize the numbers here briefly, and then will use the Annual Summary at the bottom to track the performance of this unit separate from Property #24.
Property #25: The Financials
I financed 75% of this $80,000 purchase with the in-house financing at 5%. So my down payment was $20,000, and I incurred $6,899 in closing costs, more than typical due to the higher fees associated with this loan. I used the RIA Property Analyzer to run the final numbers on this property – here are the key metrics that the analyzer calculated for me:
Purchase Price: $80,000
Monthly Rent: $850
Monthly Cash Flow: $183
Cap Rate: 7.59%
Cash on Cash Returns: 8.20%
Total Returns w/ 2% Appreciation: 17.37%
(Want to use this calculator yourself? You can!)
OR
Due to the higher purchase price and the larger loan, the numbers here are not quite as pretty as they are on Property #24 — but they’re still very solid, and add nearly another ~$200/month in average monthly net cash flow to my portfolio.
Property #25: The Deal Sheet
Finally, to sum up Property #25 and its financials, here’s the full “deal sheet”:
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Annual Updates
For all Property Spotlights, I come back at the end of each year to provide a brief narrative of what happened at the property that year. I also update my annual and cumulative figures for the property, including cash flow, equity growth, and occupancy.
The first Annual Update for this property will be published after the end of 2024.
About the Author
Hi, I’m Eric! I used cash-flowing rental properties to leave my corporate career at age 39. I started Rental Income Advisors in 2020 to help other people achieve their own goals through real estate investing.
My blog focuses on learning & education for new investors, and I make numerous tools & resources available for free, including my industry-leading Rental Property Analyzer.
I also now serve as a coach to dozens of private clients starting their own journeys investing in rental properties, and have helped my clients buy millions of dollars (and counting) in real estate. To chat with me about coaching, schedule a free initial consultation.
