Hey everyone, so my wife and I are about to close on our first Duplex. Our question is how should we actually prepare for CapEx? We ran the numbers on the BP calculator using 5% for the CapEx budget like Brandon Turner talks about in his webinars, but we were wanting to actually know what we should expect and prepare for. I have the book on Estimating Rehab Cost by J. Scott and that helps out a ton. A little preface about the property, it is a 3/2 each side, single story duplex. Built in 2009, so the roof, water heater, furnace, ect. are all still original. The property is in pretty good shape, one of the units will need the basics like paint and carpet off the bat after we close. Is there a certain way we should be budgeting for the future on this property? Sorry for the long winded question, any advice would be greatly appreciated.
@Garrett T Colburn Everything will wear out so it is good that you are contemplating future expenses. Most underestimated expense is capex. These are some of the items needed in a capex budget. Roof 25 year life span, floors,10 year life, appliances and hot water heater 12 year life span, hvac 20 year life span, kitchen and bath remodel 20 year life span. A comprehensive list in a spreadsheet in the files section called cap ex by @ Sam Tato. Let's look at the roof. Assume 10k to replace. $10000/25 year life span/12 month s in a year=$33.33 per month. You only have 14 years to recoup the price of a roof. $10000/14 years remaining life span/12 months in a year=$59.52 per month.
@Tim Herman Thanks Tim! This helped out a ton.