Help using the calculator's

10 Replies

Forgive me if this has been posted before. I did search the forums looking if someone else asked this and I did not find it so I will just ask. 

I am trying to do what @Joshua Dorkin and @Brandon Turner suggest and that is to analyze properties as much as I can so that way I get the practice on using the tools and get in the mind set of looking at the properties and everything that it entails and being able to identify good properties from bad properties. My situation is this I have played with the properties calculators, all of them except the wholesale and rehab and all the properties I run on them tend to be a good investment even offering them at full price. 

So my questions is am I using the calculators wrong in a way that all properties are a good buy (I say not even possible on this) or does everything seem like a good deal and you half to decide on how much money you want from the properties and what your time is worth. 

I have hard time believing that no matter what property I put in the calculator that it is a good deal. I have watched the videos and see them do it over and over again and show me how to use them and how to see good and bad deals, but when I do it they all look good. So it has to be something I am missing or doing wrong or anything. 

Example brand new 4 plex across the street from my house is going for 460,000 average rent for these is 900 - 1200, if I put down any type of amount it all comes out in my book to be a good investment. I say that is BS, that is way to much for this area and you would not make a good profit unless you put 50% down or more. So I say being a newbie and can not get the simplest thing down is very frustrating to me.

Why don't you post your examples ? What is your criteria for a good deal and are you expenses,financing ,taxes  etc all reflected in your results 

Increasing down payment doesn't increase profits. It increases cash flow but not profits.

What do you consider to be a good deal?  Some investors won't touch a property with less than several hundred in cashflow and 15% cash-on-cash return.  Others are content with a cashflow negative property due to appreciation.

@Jordan B. my idea of a good deal is anything 100 plus per unit after everything is cleared. I am looking for something cash flowing 400 plus a month or 12 plus cash on cash return is my goal. I am just not sure what I am looking at when it comes to numbers since it seems that any property I am putting in them is making it look like a good deal and I sit here and go if that is really a good deal why have they not sold in a week or two. I think this is all newbie nerves taking over me or analysis paralysis type situation. If I didn't shave my head I would be pulling my hair out. LOL. 

Originally posted by @Jon Mccarthy :

@stiven

@Steven Picker what do you think about this one? it is a brand new construction.

Take another look at your expenses. Every situation is different, but I'm hard pressed to believe the CapCx, Repairs, Vacancy, and Management are 3%. For my SFR & Duplex hunt, I'm using 10% for management, 10% for CapEx, 5% for repairs, and 5-10% for vacancy depending on the property. Find some local pros and find out what they're paying.

@Jon Mccarthy I don't see property tax.... and I also believe that your expenses are a little low. Maybe not right away, but things will need repair in a few years and you need to reserve now to have the funds available.

Awesome thank you @Jordan B. that gives me a better idea of what the numbers should be and that helps me better understand how to go about getting the real numbers. I thought that the numbers I put in were high and looking at what you put makes A LOT more sense to me. I have asked quite a few people up here about what I should put in those fields around what they budget and plan but I have not gotten very good responses. 

@Jason DiClemente yep I have missed that section not sure how I missed that but average property tax for my house is 1200 a year I am not sure if that changes for multi family units. And I did not factor in future expenses another thing I missed. The picture that I was not seeing is starting to become more clear for me thank you everyone please keep letting me know other things I need or I am missing. 

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