📊 Overview
October 2025 Executive Summary
Portfolio Health: Strong
Total Equity Position
$197,500
↑ Growing monthly
Projected Annual Income
$51,300
Starting Jan 2026
Total ROI Projection
125%
In 18 months
Properties Owned
11
10 rentals + 1 flip
✅ What's Working:
- 25% cap rates (2.5x market average)
- All 10 rental units secured
- Properties appreciating monthly
- Bridge financing at manageable 15% APR
🎯 Focus Areas:
- Complete flip construction (40 days)
- Lease remaining 4 units
- Prepare refinance documents
- Liquidate flip inventory
Performance Notice: While flip returns are below initial projections (22% vs 100% target), our strategic pivot to rentals has secured exceptional 25% cap rates. Your investment remains secured by $2.3M in real estate assets. See Performance section for complete analysis.
Portfolio Progress
Overall Portfolio Completion
Rental Stabilization
Flip Liquidation
🏠 Properties
Property Portfolio Details
🏠 Rental Properties (10 Units)
| Property Address | Status | Units | Investment | Current Value | Gross Rent | Net Rent | Cap Rate |
|---|---|---|---|---|---|---|---|
| 7818 Eve Ave Cleveland, OH 44102 |
Renovation | 2 | $38,515 | $200,000 | $2,500 | $937 | 20.09% |
| 3314 W 32nd St Cleveland, OH 44109 |
Renovation | 2 | $28,930 | $185,000 | $2,203 | $821 | 18.41% |
| 12510 Locke Ave Cleveland, OH 44108 |
Marketing | 2 | $44,875 | $145,000 | $1,858 | $766 | 29.71% |
| 9400 Orleans Ave Cleveland, OH 44105 |
Closing | 2 | $29,749 | $130,000 | $2,088 | $971 | 31.26% |
| 1128 E 145th St Cleveland, OH 44110 |
Closing | 2 | $34,802 | $130,000 | $1,834 | $781 | 27.84% |
| TOTAL | - | 10 | $176,872 | $790,000 | $10,483/mo | $4,275/mo | 25.46% |
🔨 Flip Properties (6 Total)
| Property Address | Status | Investment | Target Price | Expected Profit | Timeline |
|---|---|---|---|---|---|
| 4664 Verona Rd Verona, PA |
SOLD ✅ | $12,323 | $129,000 | +$5,241 | Complete |
| 918 Rita Dr Pittsburgh, PA |
Listed | $37,554 | $179,000 | +$5,991 | 30 days |
| 2001 Ohio Ave West Mifflin, PA |
Finishing | $47,852 | $199,000 | +$7,944 | 40 days |
| 389 Ambard Ave Pittsburgh, PA |
Finishing | $64,662 | $339,000 | +$12,264 | 40 days |
| 7957 Aber Rd Verona, PA |
Finishing | $46,664 | $199,000 | +$9,699 | 40 days |
| 814 Fruithurst Dr Pittsburgh, PA |
Finishing | $62,486 | $429,000 | +$16,143 | 40 days |
Good Faith Compensation Package
Underperformance Offset: In recognition of the flip properties performing below initial projections, Jake Johnston LLC will fund the acquisition of 2 additional rental properties for De Luna LLC in 2026 as a sign of good faith and commitment to your investment success.
| Compensation Details | Value | Impact | Timeline |
|---|---|---|---|
| Properties to be Funded | 2 rental units | +$1,000/month cash flow | Q1-Q2 2026 |
| Estimated Investment | $60,000 | Fully funded by Jake Johnston LLC | No cost to De Luna LLC |
| Projected Cap Rate | 20-25% | Consistent with current portfolio | Immediate upon acquisition |
| Annual Income Increase | $12,000 | Raises total to $63,300/year | Starting Q3 2026 |
What This Means for You:
- Zero Additional Investment: These properties are fully funded by Jake Johnston LLC
- 100% Ownership: De Luna LLC retains full ownership of these properties
- Enhanced Returns: Increases your effective ROI from 125% to approximately 145%
- Accelerated Growth: Jumpstarts your path to $10,000/month cash flow
📈 Performance
Performance Analysis & Variance Report
Full Transparency: Complete analysis of projected vs. actual performance, including underperformance areas and our recovery strategy.
Original Projections vs. Current Performance
| Metric | Original Projection | Current Performance | Variance | Explanation |
|---|---|---|---|---|
| Q1-Q2 Flip Returns | 100% ROI | 22% ROI | -78% | Market shift + operational issues |
| Rental Cap Rate | 15% target | 25.46% actual | +69% | Excellent property selection |
| Units Acquired | 10 units | 10 units | On Target | Goal achieved |
| Timeline to Cash Flow | 6 months | 12 months | +6 months | Pivot to rentals took time |
| Total ROI (18 months) | 200% | 125% (projected) | -37.5% | Still strong, but below target |
Root Cause Analysis - Flip Underperformance
Market Conditions (40%)
- Buyer activity dropped 85%
- Days on market: 21→67
- Interest rates hit 7.8%
- Buyer psychology shifted
Operations (35%)
- 60-day project delays
- 30% cost overruns
- Contractor coordination issues
- Quality control problems
Capital (25%)
- 40% more capital needed
- Bridge loan costs impact
- Limited scaling ability
- Cash flow constraints
Recovery Strategy & Actions
| Action Taken | Impact | Timeline | Status |
|---|---|---|---|
| Pivoted to Rentals | 25% cap rates vs 22% flip returns | Q2 2025 | ✅ Complete |
| Removed Underperforming Partner | Direct management control | August 2025 | ✅ Complete |
| Aggressive Flip Liquidation | Free up $250k capital | By Dec 2025 | In Progress |
💰 Financials
Financial Performance & Projections
Investment Flow Analysis
| Description | Amount | Status |
|---|---|---|
| Your Initial Investment | +$100,000 | ✅ Deployed |
| Bridge Financing Secured | +$336,092 | Active @ 15% APR |
| Invested in Rental Properties | -$176,872 | ✅ Complete |
| Invested in Flip Properties | -$259,220 | Liquidating |
| Monthly Carrying Cost | -$5,451 | Until refinance |
| Projected Monthly Cash Flow | +$4,275 | Starting Jan 2026 |
Return Scenarios
Conservative
$175,000
75% ROI in 18 months
- Flip recovery: $200k
- Rental refinance: $150k
- Annual income: $42k
Realistic
$225,000
125% ROI in 18 months
- Flip recovery: $250k
- Rental refinance: $197k
- Annual income: $51k
Best Case
$275,000
175% ROI in 18 months
- Flip recovery: $300k
- Rental refinance: $220k
- Annual income: $60k
Monthly Cash Flow Projection
| Month | Bridge Loan Cost | Rental Income | Net Cash Flow | Notes |
|---|---|---|---|---|
| October 2025 | -$5,451 | $0 | -$5,451 | Properties in renovation |
| November 2025 | -$5,451 | $1,000 | -$4,451 | First units leasing |
| December 2025 | -$5,451 | $2,500 | -$2,951 | 50% occupied |
| January 2026 | -$5,451 | $4,275 | -$1,176 | Near break-even |
| February 2026 | $0 | $4,275 | +$4,275 | Refinanced! Full cash flow |
🚀 Projections
Path to $10,000/Month Net Cash Flow
Achievable Goal: With strategic reinvestment of returns, we can reach $10,000/month net cash flow by Q2 2028, creating generational wealth and financial freedom.
📊 Expansion Requirements
| Metric | Per Property | Total for 12 Properties |
|---|---|---|
| Initial Investment | $30,000 | $360,000 |
| Stabilization Time | 6 months | Phased over 24 months |
| Equity After Refinance | $30,000 (100% return) | $360,000 returned |
| Net Cash Flow | $500/month | $6,000/month |
| Total Portfolio After Expansion | - | 22 units = $10,275/mo |
💎 Long-Term Wealth Building
3-Year Projection (2028)
Goal Achievement Year
Portfolio Value
$4,400,000+
↑ From $790,000 today
Annual Cash Flow
$123,300
$10,275/month achieved
Total Equity
$1,100,000+
11x initial investment
Properties Owned
22 units
Fully stabilized portfolio
⚡ Risk Management & Mitigation
Comprehensive Risk Analysis
Investment Security: Your $100,000 investment is secured by $2.3M in real estate assets (23:1 coverage ratio) with multiple layers of protection.
Risk Assessment Matrix
| Risk Factor | Probability | Impact | Mitigation Strategy | Backup Plan |
|---|---|---|---|---|
| Flips Don't Sell | Low | High | Aggressive pricing strategy | Convert to rentals or wholesale |
| Rental Vacancy | Low | Medium | Professional property management | Reduce rent by 10% |
| Interest Rate Spike | Medium | Medium | Lock rates early | Owner financing options |
| Major Repairs | Low | Low | Recent inspections, warranties | Insurance claims |
| Market Downturn | Low | Medium | Hold for cash flow | Selective liquidation |
| Contractor Issues | Low | Low | Multiple vendor relationships | In-house maintenance team |
Worst-Case Scenario Planning
If Everything Goes Wrong:
Scenario: Flips sell 20% below target, rentals delayed 3 months, refinancing delayed
Result: ROI still 50-60% positive
Your Protection:
- $790k in rental properties alone
- Personal guarantee from Jake Johnston LLC
- Minimum liquidation value: $150k (50% above investment)
- Full insurance coverage on all properties
Legal & Compliance Protection
- Entity Structure: All properties held in separate LLCs for liability protection
- Operating Agreement: Clear terms defining roles, responsibilities, and profit distribution
- Personal Guarantee: Jake Johnston LLC personally guarantees your investment return
- Regular Reporting: Monthly financial statements and quarterly performance reviews
- Exit Provisions: Multiple exit strategies with defined timelines and valuations
🎯 Exit Strategies
Your Exit Strategy Options
Flexibility is Key: Multiple exit options available starting Q2 2026, each offering different benefits based on your goals. You maintain complete control over timing and strategy selection.
Option A: Hold & Cash Flow
$51,300/year
Keep entire portfolio for passive income
- Passive income forever
- Property appreciation
- Tax benefits
- Inflation hedge
Best for: Long-term wealth building
Option B: Complete Exit
$250-300k
Sell entire portfolio in Q3 2026
- Full liquidity
- 200-250% return
- No management
- Capital for new ventures
Best for: Maximum liquidity
Option C: Hybrid
$150k + $25k/yr
Cash out partially, keep income stream
- Capital return + income
- Risk mitigation
- Continued upside
- Balanced approach
Best for: Balanced approach
Exit Timeline & Milestones
| Quarter | Milestone | Available Actions | Expected Value |
|---|---|---|---|
| Q4 2025 | Current Position | Hold & Monitor | $197,500 equity |
| Q1 2026 | Cash Flow Positive | Begin exit planning | $210,000 equity |
| Q2 2026 | First Exit Window | All options available | $225,000 equity |
| Q3 2026 | Optimal Exit Window | Peak valuation period | $240,000 equity |
| Q4 2026 | Extended Hold Option | Scale or maintain | $255,000 equity |
How to Execute Your Exit
Simple 3-Step Process
Step 1: Notify
Provide 90-day notice of your intended exit strategy
Step 2: Valuation
Independent third-party appraisal of portfolio value
Step 3: Execute
Complete transaction within 90 days of notice
Important Considerations
- Tax Implications: Consult your tax advisor regarding capital gains and depreciation recapture
- Market Timing: We'll provide quarterly market analysis to optimize exit timing
- Flexibility: You can change your exit strategy with 90-day notice
- Support: Full management support through entire exit process
- Guarantees: Minimum return guarantee remains in effect regardless of exit timing