Assistance with Analyzing Deals

2 Replies

Hi I’ve been analyzing deals using the BP calculator, that I receive via email from a few agents. Could someone please provide some input on a couple of questions...

I live in San Antonio, TX and am looking to invest in a multi-family here, so what is the typical cap rate to put for my area?

Are the majority of the fixed landlord-paid expenses actually paid by the tenant?(electricity, water, garbage,etc.) When does the landlord actually have to cover these?

For my current calculations I’ve been using 5%, 10% and 5% for my vacancy, repairs, and cap ex. Are these good percentages to be putting here?

Finally, I’ve been outing 2% for my income, PV and expenses growth. Is this accurate?

Thank you and any response is greatly appreciated!

@John Desmet Cap rate is meaningless on small muti. If you are buying big multis call a commercial broker. A SFH all utilities are the tenant responsibility except when vacant. Small multi, it depends. Are they separately metered. if not the landlord pays. In the reports you get it should say who pays. Why did you pick those numbers for percentages. 5% vacancy is 1 month out of 20. I use 8% or 1 month out of 12. Repairs I use 5%. Capex I use 10%. Capex needs to include roof 25 year life span, floors 10 year life span, appliances and hot water heater 12 year life span, hvac 20 tear life span, kitchen and bath remodel 15-20 year life span, etc. If the rent is less than 1k per month capex % increases. I usually use what I consider is inflation for future growth. 3%. It is nice to project but it is WAG(wild a** guess). Cash flow is king.