May 2021: The Dust is Settling

May continued with similar themes from the previous month. Those being locking down the entity setup and getting vacancies settled. Regarding entity setup, good progress was made. Vacancies continued to be a challenge but we finished strong at the end of the month.

The entity setup was complete last month so the final step completed this month was completing the partnership addendum. The most important part was also complete which was updating the deed with the entity thereby placing the property under ownership of the entity. Finally, though not related to the entity but falls into the legal realm, because the fire remediation was complete the escrow funds were released in the amount of $1,330 was released via refund check. These funds were passed to property management to cover the expense.

We haven't received any reply to the formal insurance inspection response. So coverage continues through the term but we have a "pending cancellation" until we come to terms. In this scenario, the insurer typically just doesn't want the property. With the formation of the LLC it is a good time to transfer the policy to the entity anyway so we sought out a local firm that deals heavily in multi family rentals. We received the referral from our good friend Francis (Follow the Blueprint!). The application and approval process went pretty smoothly and all good to go. The new insurer will send over another inspection of which property management will coordinate. Finally, property management is still proceeding with low cost repairs that popped up during the first inspection report. Still outstanding the likely porch repair of which we are still waiting for an estimate. Our expectation is that this repair will fall more into "capital improvement" over rehab happening some time later this year.

As noted in April, the 2nd floor tenants did vacate. Property management handled the subsequent repairs and debris removal. Unit rehab was inline with estimates landing about $2,750. Fortunately, this turn was significantly under budget helping keep us inline with overall rehab plans. The rent ready rehab was officially complete and tenant acquisition has begun. Good progress as there is already a tenant in consideration and in the screening process.

For much of May the lingering 3rd floor tenants continued to be a problem with week over week promised but not executed exits. Property management was prepared to start eviction process, however, tenants did finally vacate at the end of the month. Estimates for unit rehab / rent ready are again favorable coming in under $3,000. Conservatively we are expecting there may be some discovery increase there.

Unit 2 in "Rent Ready" state