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Real Estate Deal Analysis & Advice

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Jose Castillo
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  • Real Estate Broker
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[Calc Review] Help me analyze this deal

Jose Castillo
Pro Member
  • Real Estate Broker
Posted May 12 2023, 06:52

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*This link comes directly from our calculators, based on information input by the member who posted.

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Evan Polaski
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#2 Commercial Real Estate Investing Contributor
  • Cincinnati, OH
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Evan Polaski
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#2 Commercial Real Estate Investing Contributor
  • Cincinnati, OH
Replied May 12 2023, 07:24

What is the age and condition of the property?  You are only reserving $1000/yr in capex.  While you may get by with no capex spend for the next several years, if you need a new roof in year 5, you have burned through all of your reserves and then some.

Same with your repairs and maintenance.  Assuming you are lumping turnover costs into that, at 5% vacancy, you are effectively turning the property every two years.  Renters can be rough on places but generally it is all wear and tear.  I don't know Florida law, but in my market you cannot withhold wear and tear, so you are likely to eat through your entire repair budget each turn, leaving you nothing reserved for the ac recharge, or garbage disposal that stopped working...

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Jose Castillo
Pro Member
  • Real Estate Broker
4
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7
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Jose Castillo
Pro Member
  • Real Estate Broker
Replied May 12 2023, 08:20

The effective year built of the property is 1965 making it 58 years old. The property does need rehabbing. This is a condo and I would need to verify the age of the roof and HOA reserves. In Florida the garbage disposal is included with tax roll payment. Thank you for sharing your input on this analysis. Should I increase the monthly cost from 5% to 10%?

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