Cambridge, MA · Member since 2017 · 6 posts · 4 votes
Hi, I'm trying to decide whether to make my first offer on a 4-unit, and my cashflow analysis depends entirely on what I budget for monthly CapEx. My estimate shows around $800 in total CapEx, which amounts to 20-30% of monthly rent, depending on what renovations I make. This seems higher than the typical 5-15% "rule of thumb" people use, so I'd appreciate advice from someone more experienced to see if my attempt to be conservative is overestimating CapEx.
Here are some details on the property:
New England building, 3,000 square feet, built in early 1900s
4-Units: two 3BR/1B, to 1BR/1BA
Property has had recent roof and heater replacement, but has had same tenants and little interior work done in 10 years; Class C property in Class B area
Total market rent today of $3300 per month; $4,100 after $80,000 in renovation
I assume 10% repair cost before renovations, 5% after renovations
Hi, I'm trying to decide whether to make my first offer on a 4-unit, and my cashflow analysis depends entirely on what I budget for monthly CapEx. My estimate shows around $800 in total CapEx, which amounts to 20-30% of monthly rent, depending on what renovations I make. This seems higher than the typical 5-15% "rule of thumb" people use, so I'd appreciate advice from someone more experienced to see if my attempt to be conservative is overestimating CapEx.
Here are some details on the property:
New England building, 3,000 square feet, built in early 1900s
4-Units: two 3BR/1B, to 1BR/1BA
Property has had recent roof and heater replacement, but has had same tenants and little interior work done in 10 years; Class C property in Class B area
Total market rent today of $3300 per month; $4,100 after $80,000 in renovation
I assume 10% repair cost before renovations, 5% after renovations
For what it's worth, I budget 8% for CapEx and another 8% for routine maintenance. I acquired an 80 unit six months ago and haven't had any issues setting aside a total of 16%. However, the complex was built in the early 90's.
Hi, I'm trying to decide whether to make my first offer on a 4-unit, and my cashflow analysis depends entirely on what I budget for monthly CapEx. My estimate shows around $800 in total CapEx, which amounts to 20-30% of monthly rent, depending on what renovations I make. This seems higher than the typical 5-15% "rule of thumb" people use, so I'd appreciate advice from someone more experienced to see if my attempt to be conservative is overestimating CapEx.
Here are some details on the property:
New England building, 3,000 square feet, built in early 1900s
4-Units: two 3BR/1B, to 1BR/1BA
Property has had recent roof and heater replacement, but has had same tenants and little interior work done in 10 years; Class C property in Class B area
Total market rent today of $3300 per month; $4,100 after $80,000 in renovation
I assume 10% repair cost before renovations, 5% after renovations
For what it's worth, I budget 8% for CapEx and another 8% for routine maintenance. I acquired an 80 unit six months ago and haven't had any issues setting aside a total of 16%. However, the complex was built in the early 90's.