Deal Analysis....What would you do?

3 Replies

Year 1 assumptions seem to be OK. Most people split apart maintenance and CAPEX. You're assuming 10% for maintenance and 0% for CAPEX. If the property is an good-great condition then 10% should be enough for both. $500/mo for a duplex seems reasonable.

Year 1+ assumptions seem a bit off. Utilities and expenses are increasing faster than rent and taxes? Taxes are $10.5k/yr. Are they really increasing at 3%/yr? 

I would set all future projections to 0% and then see if it's a good deal. If yes, then you can add in future projections 

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@Michael Cioffi

I’m looking at buying my first multi family in the near future, and it’s my understanding that it’s more likely than not I’ll need a 25% down payment instead of 20% but I’m sure there are opportunities to find the 20% down you’ve got here. I’d gladly welcome folks to tell me I’m wrong on that though!

You could maybe also fine tune some of your estimates by looking at your specific markets vacancy rate, appreciation data, tax history on the specific deal, etc.