Here’s How Much Cash Flow Emil Generated From $44,788 in Rental Income in 2020

In this episode we run through Emil's year end financial report and see how his 3 property portfolio performed last year.    Emil's Blog: https://emilshour.com/blog/ --- Transcript Tom: Greetings, and welcome to The Remote Real Estate Investor. On this weekend wisdom, we're putting a meal on the hot seat. He just finished an exercise of looking at his year in financials and we're gonna ask him about how his portfolio did. Alright, let's do it.   Emil, end of year, how'd you do?   Emil: Yeah, so I run a personal blog where I talk about real estate investing and stuff. And at the end of it every year, I do like a full rental income report where I look at how much money came in how much money went out. So how much do we make at the end of the year. And so this is our 2020 rental income report. So total, we had we ended the year with four properties, six doors total, so three single family rentals, and one triplex and our gross rent was 44,788. But that's just gross rent.   So let's dive into all the other numbers. So operating expenses, which is things like I put property tax insurance, any owner paid utilities, property management, hoa, repair, maintenance, all that stuff goes into my operating expenses that came in at 17,464. And then my mortgage payments total on those properties came out to 17, zero to 117 $1,000 21. And so my cash flow, so 44,788 minus my expenses and debt payments, our year end profit came out to 10,300.   And, and a couple quick things to note on that we had a property that we sold about midway through the year. So we had another single family rental that we sold in May. And then the triplex we bought at the end of November. So the triplex really didn't have much in terms of cash flow. Actually, it had negative because we had to come in and make some repairs right away. So that's basically on like three and a half properties that we made last year. And last year was a pretty no big expenses, no turns. So this was a pretty good year for us to have $10,000 in cash flow on basically three and a half properties.   Michael: That's amazing. Just one thing I want to point out to everybody listening is you said your operating expenses were like 17,000. And your gross cash flow was roughly 44,000. Right?   Emil: A gross rent 44,000. Yep, yep.   Michael: So if we take 17,000 divided by 44,000, to determine what your expense ratio is, you're down to like 38 and a half percent, which is pretty stellar. When most people we talk about that 50% rule, we throw away 50% of the expense, excuse me throw away 50% of the income just to expenses before the mortgage, you cut that down by 11 12%. so nicely done. And that's awesome.   Emil: Well, thank you. But it's not really me. We've talked about this offline. I think real estate is a lumpy business. Some years you'll do well another year, you could have to replace an HVAC and have two turns and then you're having a not so great year. So 2020 was a smoother year for us. And that's why the ratio is good. The 50% if you probably look at a lifetime, you know, maybe you own a property for 10 years. I bet you that 50% is much closer.   Tom: Peanut Butter bread.   Michael: Do you guys know what Maltomeal is? Just real quick side tangent.   Emil: Maltomeal?   Michael: molto meal. It's like, like Quaker Oats kind of like oatmeal. But I think for more older people, I used to eat it all the time as a kid and my dad like you have to pour it in with hot water. And if you don't like stir it, it gets really lumpy. And so anytime It was like, really lumpy, I just think of like, eating maltomeal meals a kid and my dad made that was gross. Alright, thanks for coming on that ride with me guys.   Emil: And then you found $20   Michael: Yeah, it was great. And then I took the gross multi meal wasn't such a big deal. So that 10,000 in cash flow. Can you share with us how that represents a cash on cash return metric for you?   Emil: Yes. So if I'm looking at just last year, it's a across