Property Evaluation - Advice on Approximate Figures & Analysis
Hello BP folks,
I wanted to get your thoughts on the following when you crunch your numbers on properties (particularly multi-fam prop's).. How much do you compute/estimate the cost (per unit/month) when analyzing a property on the following (I live in Austin if one is wondering):
- Homeowners Insurance: Would it usually be ~ $25/per unit per month, or would that be closer to ~ $60/per unit per month? Am trying to be accurate in my evaluation to ensure some cash-flow.
- Repairs and Maintenance (not only when submitting an offer, which I assume is around ~$5,000 if in decent condition), but also year after year. Is it around ~$200 per unit per multi-plex per month (so around $9,000 per year), or is that too much based on your experience?
- Utilities: Can you not have the tenant pay Garbage, Sewer, Water, Gas, Electricity, or are you obliged to cover certain utilities?
- Accounting and Legal: How much do you estimate accounting and legal fees to cover your end of year taxes, evictions, or contracts?
Separately yet related, which are the greatest determinants for a good deal worth pursuing in your eyes, would it be the income expense Ratio (1%, 2%, 50%), would it be the Monthly Cashflow/DCR, Cash-on-Cash ROI and/or CAP rate to ensure all figures are +ive, or is it a mix per one's personal preference? In other words, what would you consider (vs. certainly disregard or certainly regard) when some of the numbers are not strong/+ive.
Thanks!
Eli