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Updated over 5 years ago on . Most recent reply

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54
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Michael Chilton
  • Des Moines, IA
25
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54
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[Calc Review] Help me analyze this deal

Michael Chilton
  • Des Moines, IA
Posted

View report

*This link comes directly from our calculators, based on information input by the member who posted.

Most Popular Reply

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Jaysen Medhurst
  • Rental Property Investor
  • Greenwich, CT
2,466
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4,876
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Jaysen Medhurst
  • Rental Property Investor
  • Greenwich, CT
Replied

This might be worth digging further into, @Michael Chilton. The biggest question is why do you think you'll be able to create $100k of value with only $5k of renovation? What you pay is, by definition, what the property is worth.

I'm assuming this is SFR, so you don't pay any utilities, lawn care, or snow removal. A few things to consider in your analysis.

  • Vacancy might be a bit low. I usually figure 8%, but that's very localized.
  • Repairs and CapEx are probably fine, but they may tick up closer to 15% combined as the years go on.
  • 5% management is probably unreasonable. You should figure 10-12%. 
  • Why a 20 year loan at 5%? Even with commercial mortgages, I'm seeing low to mid 4s. I bet you can find a better rate and longer term, if you want it.
  • Jaysen Medhurst
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