Running a SFH through the Rental Properties Calculator

2 Replies

I am looking at purchasing a new home within the next year. This will be my second mortgage. My first is an FHA so this one will more than likely be a conventional with, lets say 20% down. Rates right now are any where from 4%-5% for conventional. I've been trying to run some houses through the calculator but am unsure if I am doing it right.

Would someone with a little time be willing to run a random SFH listing in my area and explain to me what you did and how you came up with the numbers.

I am finding a rough estimate for the property taxes on the actual listing. For the purchase price I am putting in the asking price( is this right that I do that or do I need to do other math to come up with a better number for the report?).

If the house technically needs no work then what do I put in for the ARV? If it looks like it needs work, I just have to estimate based on pictures right? or are you guys using another estimate procedure.

For closing cost I am putting in 5k just covering my behind. I think it's like 2%-5% on the purchasing price correct?

Estimated repair cost is an estimate( I get that). Do you guys just go off of pictures and see what you want updated, then plug in the numbers for the new renovations you want?

I'm unsure what to put in for Origination points. 1-3?(pretty sure this is what it means by points)

What other charges should I calculate from the lender that are pretty standard with any deal?

Should I have a Cap Rate for SFH's?

For Gross Rent I am comparing it with like property's in the area

I'm assuming there will be no other monthly income

I will have my tenants pay for everything. Utilities, HOA etc.

What's a safe vacancy rate to use for SFH's? 2%?

Should I account for income increases. I'm assuming I should just put zero there to be safe.

I'm accounting 2% for repairs and maintenance.

Not putting anything in for capital expenditures or property management.

I'm putting 1% for expenses increase.

Like I said, this will be my second home but I plan on turning this into a rental as well. I want to buy knowing that I'm getting a good deal(rental wise for the future).

Thanks for any and all help. My zip that I'm looking in is 20619, California MD.

Sorry if there is a sticky on this subject but I learn better from real world examples that pertain to my situation.

Thanks again,

James

from what I gather from reading this forum you want 5-10% for maintenance. 5-10% for capex. 10% PM even if you do it yourself that could change or pay yourself. Vacancy figure 1 month out of the year. 8-10%. 

As far as loan/closing this should be close to exact numbers. Get approved for the loan you can lock rates and figure points and everything else out. They will basically tell what you'll need at closing. The more estimates and guesses the higher chance all your numbers will be off and you'll be negative. 

This is a business do your due diligence and try to be exact on the ones you can and conservative on what Ya can't. 

Ok, thank you Michael. I am meeting with a lender Saturday at 0900hrs to get pre approved for the next property. I will make sure to get the rates, points, etc.

I appreciate your advice

James

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