Diary of a Real Estate Fund Manager

Investment Summary

This property is part of the 29 Pack Portfolio purchased in the summer of 2025. The standard purchase price assigned is $54,000, including related costs.

The property manager was able to raise the rents to where we expected before closing.  The property has high taxes bringing the cash-on-cash is 8.5% in our starting year. This likely does not represent the full rent potential of this property. For now, our CapEx planned for this property has mostly not been used, so we will leave it to the property managers to see if we can raise the rents incrementally as is often the case.

The tenant has refused to allow the inspectors to take internal photos, but the acquisition team’s reports are that the $5,000 capital expenditure is mostly earmarked for external issues such as a crack in the concrete on the front porch, and an exchange of the glass block window for the basement.  The team has factored in the fact that the tenant has lived here since 2020. The internals may not need immediate attention but are generally not updated to compare with top comparable sales. Internal photos from that time may be available on the property page on Zillow.

Investment Summary

This property is part of the 29 Pack Portfolio purchased in the summer of 2025. The standard purchase price assigned is $54,000, including related costs.

This particular property started with an estimated first-year cash-on-cash return of about 4%, due to the extremely low rent inherited. After further talks with the tenant, the team terminated the lease contract and is preparing for a full rehab. The property has excellent comparable sales and, with a substantial turnaround, will likely fetch $1,200 or higher in rent alongside the value creation it will bring.

The original underwriting thesis required some modification for this property. The team has typically over-budgeted capital expenditures, so the 29 Pack Portfolio’s total underwriting budget may not need adjustment. The dust will have to settle before the team can make a full determination of whether we achieved our original goals, but in the meantime, individual properties are receiving the attention they need.

We will report back as more numbers arrive. There are times when things do not go as planned. We remain nimble and in constant communication with our property managers, fully aware that we can handle curveballs when they come—as they often do in real estate.

Investment Summary on the 29 Pack Mostly-Rented Portfolio Purchase

The acquisition team was able to locate and negotiate an extremely favorable opportunity in this 29 Pack.

The thought process is that while picking up value-add SFRs one by one is a profitable model we have perfected, it typically takes up to nine months before a property is cash-flowing. That time lag has a cost. When we can vet every home in a discounted rental portfolio to our satisfaction, we can apply our other model—purchasing rented properties—and have them perform right away.

Our value-add property purchases typically need about $100,000 until stabilization in order to achieve top rent of $1,200.

In contrast, this pre-existing portfolio was quite attractive at $52,000 a door, because of the below components

• mostly in areas we focus
• priced at $52,000 a door; less serious capital expenditure to follow
• mostly rented at $720 a door; possible rental raise in play immediately after the closing

Out of the 29, only three properties, (5203 Beaconsfield, 11123 Wayburn, 13636 Pinewood) were vacant.

All the properties were given a visit that included a full inspection and renter interview followed by a repair estimate. Many of the rented properties were basically underwritten for $5,000 capital expenditure per property.  Some, including a few that are rented, needed more work, bringing the average capital expenditure per unit to $10,000.