First deal - Analysis help? Buy-and-hold multi family
Hi All!
My husband and I just looked at two duplexes. We can buy them individually or as a package. Here are my calculations using the BP analysis tool if we buy them as a package:
Monthly Income: $2,795.00
Monthly Expenses: $2,222.31
Monthly Cash Flow: $572.69
Pro Forma Cap Rate: 10.36%
NOI: $13,983.00
Total Cash Needed: $41,250.00
Cash on Cash ROI: 16.66%
Purchase Cap Rate: 11.19%
Gross Rent Mult: 3.73
2% rule: 2.07
Debt coverage ratio: 1.97
Total monthly cashflow using the 50% rule: $804.94
Here's one of my many questions: I entered 10% of gross monthly rents as expenses for both CapEx and repairs. Of course, that affects the analysis pretty significantly. Am I using the wrong percentage? What do you normally use for these figures?
Thanks in advance for the advice!
Cheers~
Tara Piantanida-Kelly