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Updated over 10 years ago on . Most recent reply

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56
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7
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Ryan VanPatten
  • Homeowner
  • Herndon, VA
7
Votes |
56
Posts

Where to calculate Cap Ex?

Ryan VanPatten
  • Homeowner
  • Herndon, VA
Posted

Hey everyone!  I wasn't sure where to post this questions so, since it has to do with startign out a bit I placed the question there.

Bascially, I have tried to do some quick searches on this question, but I haven't come up with anything great.

Where do you calculate Cap Ex? 

I hear not to count it as an expense, but it definitely effects cash flow numbers.  I am wondering where you place that calculation in your numbers?  After expenese?  After cashflow?

Please feel free to give a brief or in detail anwser.

Thanks and I look forward to hearing from everyone.

Most Popular Reply

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688
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467
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Paul Ewing
  • Investor
  • Boyd, TX
467
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688
Posts
Paul Ewing
  • Investor
  • Boyd, TX
Replied

I don't count reserves for vacancy, cap ex, or routine repairs as part of my cashflow because they go into separate subaccounts (virtual) from my cash flow that I can use for purchasing other properties or to pay down debt.  I am currently doing a 10% hold for cap ex and 10 % for repairs on my properties because I don't have any major things expected.  I am hopefully buying another property this month that has a questionable HVAC so I will probably divert all cash flow into the cap ex fund for it (about 40% of rent total) just in case.  In reality if I need to do a major replacement on a property and don't have enough in the cap ex fund yet I will either rob the Peter Property (another house's cap ex fund) for Paul's salary to pay for it anyway but I try to keep separate virtual accounts and books for each place.

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