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Updated almost 9 years ago on . Most recent reply

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James Breder
  • Wholesaler
  • Paducah, KY
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Quick Deal Analyzing

James Breder
  • Wholesaler
  • Paducah, KY
Posted

When youre assessing a potential deal and quickly want to figure out the cap rate of say, a multi-family place, before you actually hit up the people for financials, what is the percent you take out as a rough estimate for expenses? I've been using 35% of total rental income for expenses (including taxes and insurance) but is that too low? Should it be more around 50%? Obviously every property is different just wondering what is the rough estimate people use

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Kyle Scofield
  • Real Estate Investor
  • Madison, SD
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187
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Kyle Scofield
  • Real Estate Investor
  • Madison, SD
Replied

@James Breder check out @Brandon Turner 's post on the following link:

https://www.biggerpockets.com/forums/12/topics/202312-50-rule

Hope this helps man! Let me know if there's anything confusing or needs clarification.

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