Percentages for Deal Analysis in Metro Detroit

[Nader Hachem]

Good afternoon BP!

I've recently been spending a lot of my time during this quarantine analyzing rental property deals using the BP calculator. My main method is find houses off the MLS and going from there. I usually set my range for houses from 50K-150K. I was wonder what percentages do you guys use to analyze deals? I've been using Vacancy 6% repairs 5% capex 8% and prop management 10%. I don't want to over/underestimate these because i feel like they are the main part for analyzing deals.

I've been looking in the Metro Detroit area such as Taylor, Melvindale, Westland, etc..

Also open to other tips you guys have when analyzing deals! (such as running comps and rent prices)

[Drew Sygit]

@Nader Hachem

Both Joe's are correct. You'll find that different areas, property types, condition of property, target market tenants, etc. all impact what the actual numbers will be.

You may want to explore and understand the 1% Rule and pick your number. You can search for it here on BP.

By the way, if you're buying a rental, start interviewing property managers ASAP and involve them in the review process before you finalize a deal. We've saved many clients from buying what looked like a good eal, that would have been a bad rental.