Calculating Potential Cash Flow

[Landon Nilson]

Hello everyone, I am in the process of getting into my first duplex/triplex. What I struggle with is calculating the potential cash flow to see if on paper it's a "good deal" I am thinking either FHA or 5% conventional loan. I'm looking for advice on how to calculate my numbers before I decided if I should proceed with the process. Is 5-6% a good number for vacancy and maintenance? What all should be included in calculating "cash flow" Thanks for the help.

[Abiram Ganesh]

Quote from @Landon Nilson:

Hello everyone, I am in the process of getting into my first duplex/triplex. What I struggle with is calculating the potential cash flow to see if on paper it's a "good deal" I am thinking either FHA or 5% conventional loan. I'm looking for advice on how to calculate my numbers before I decided if I should proceed with the process. Is 5-6% a good number for vacancy and maintenance? What all should be included in calculating "cash flow" Thanks for the help.

 I underwrite very conservatively. 8% vacancy + 16% for opex & capex together. My philosophy is that if it works with these numbers, then I'm protected for the downside. It works in my market. Might not in every market.