Running house numbers
Hey everybody - Im here with some numbers I ran for 2 homes in the area. One home is a multi family and one home is a single family. Just want to see what people think of the numbers and if I should be including anything else. Thank in advance!
Home 1: Price: $775,000 3Bd / 2.5Ba @ 2,100ft2
Down Payment (20%): $155,000
Monthly payment: $4,350
Unit 1: 1bd/1ba. Unit 2: 2bd.1.5ba
Comps: $1,800 Comps: $3,000
Total Estimated Rental Income: $4,800
NOI: $3,000 (Income - PGE, H2O, Tax & Ins, Maintenance, CapEx + Repairs)
Cap Rate: 4.6% (36,000 - 775,000 = 4.6%)
Cash Flow: $330/mo (4,800 - 4,470)
Home 2: Price: $460,000 2Bd / 1Ba @ 700ft2
Down Payment (20%): $92,000
Monthly payment: $2,650
Comps: $3,000
Total Estimated Rental Income: $3,000
NOI: $2,400
Cap Rate: 6.2%%
Cash Flow: $200/mo
I don't follow how you're calculating positive cash flow given these mortgage payments and an appropriate allowance for the expenses you mention -- taxes, insurance, maintenance, capital expenditures and repairs. If you aren't intending to self-manage, you'll need to include property management as an expense as well.
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#2 Managing Your Property Contributor
- Property Manager
- Royal Oak, MI
Please use the BP Calculators for this and then post the results here for review...
@Austin Robertson your numbers look wrong. For home 2 you have debt payments of 2650 and income of 3000 so 350 for all expense outside of debt taxes and insurance but showing 200 positive a month. So 150 for repairs, vacancy, capx, or just 5% of income.
You need to firm up your numbers and learn what the true expenses are going to be. Also your NOI is wrong or you cap rate is. But don't worry about these until you figure out your expense. If your NOI for the year is 2400 your cap rate is below 1% if its monthly NOI is the number you gave then you have more expenses there than in your cashflow numbers.
Best of luck researching.