So... How am I doing? (w/ my Property Analysis skills)

10 Replies

Just getting my feet under me here and have been spending 20-30 mins here and there analyzing multi-family properties in my local area. I was hoping to get some feedback to verify I'm understanding everything correctly and make sure I'm not making a "fatal flaw" at this stage of the analysis.

I'm using Brandon's "Buy and Hold" Calculator that I found here on the forums. Here's the property listing in Philadelphia:

Sample Analysis Property

Cap rate was found using RealtyTrac averages.

Here's a screenshot of my analysis worksheet:

ASSUMPTIONS

- 20% Down

- 2 Month's mortgage in holding costs

- 4.8% interest rate based on a mortgage broker buddy

- Insurance = Total guess. (is there as public resource that has this info?)

- Property Taxes - From listing and divided by 12

- "Other Expenses" = Total guess.

Thanks,

Ray

As stated above your estimate for repairs is probably low. My estimate on a 1900 built property is $250 per month. I would include another $100 per month for capital reserves.

I would also include a vacancy rate and to evaluate as an investment, a management fee.

Good Luck.

Bill

Hi,  @Raymond B. I agree with @Bill Jacobsen your repair cost seem low.  Your closing cost and maintenance seem low as well.  I think in your area your rents seem about right.  As for insurance, the best way to get accurate numbers is too go ahead and request some quotes. The difference in rates for multi-family can be significant.   I think in general you are doing well.  Great job for even working through the numbers.  So many just take a guess and move forward.  Verify verify verify all numbers.  

Check out some of the forums on landlording, that should lead to a wealth of information.  Best of Luck!! Keep us updated!

Friend, build a solid relationship w an insurance agent (maybe the one you have your homeowners with). Ask him to go to his insurance database to see if the property has ever had a water claim (I'm serious!). Ask then if it ever had a roof claim.

When we sold our last personal residence the buyer confronted me w my claim history! He never asked me prior, so I never said one way or another!

Perhaps ask 2-3 ins agents a what if cost - as to compare Anyways.

- Property Taxes - From listing and divided by 12

You should be able to look online at your county assessor to get the accurate tax assessment. Listing may be accurate or it may be last years assessment.

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