Operating Expenses for Multi Family in CA

[Sol Bier]

Hi All,

I am trying to get some back of the envelope, quick calculations for operating expenses for multi family (4-8 units) in LA area. 

I've seen the 50% all in operating costs being used for the general multifamily market, but the rents in the rest of the country are much lower, so the % of operating/cap expenses compared to rent is way higher since repair costs don't scale (linearly with rent) just by being in CA. Here is what I am using right now.

Taking $3k per unit at 8 units, here is what I am using as rough estimates. Is this too conservative? 

Vacancy: 8% (one month rent) 

Property Management: 10%

Repairs:  5%  ? (thats $1.2k per month)

Cap ex: 10% ? (thats $2.4k per month in my example)

Tax: 8-10% 

Total 43% 

I am seeing total expenses, taxes property management at 40-50% of total rent in some threads, so better estimates for LA would be appreciated (for 4-8 units). (https://www.biggerpockets.com/forums/88/topics/134...)