[Calc Review] Help me analyze this deal , first time investor

2 Replies

Yola - I'm not completely familiar with your area, so I'll assume that you verify the rents, purchase price, and taxes relative to the local dynamics. Some additional thoughts on the analysis are: 1) Vacancy - I would assume 5% instead of 3% as I see most banks desire that assumption, 2) Interest Rate - Seems a bit low to me, perhaps 3.5% instead of 3.0% - However, if you already verified with a potential lender I would go with that assumption, 3) Management - Are you managing this yourself? If not, I would add in a 7% management fee if you're going to use a company, 4) Water/Sewer - Most often I see that expense going to the owner, so perhaps include some expense to that in your analysis. However, if that is not correct in your local area, then ignore my comment. Good Luck! 

@Yola Hayes

My recent experience with financing was at 3.85% with an APR of 4.2%. I also include property management of 10%, I have seen 16%, in case I don't like property management. I have seen 7% for owners of 10 or more properties. Then for my vacancy rate I use 8% because that about 30 day or 1 month unless you know you are able to turn the property quicker.

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