I've not looked at the BP calculator but done plenty of SF analysis myself. On the surface, it looks like a great deal, but I would dig a little deeper.
Personally, I don't like a 50% estimate for expenses. It really isn't hard to more accurately estimate the expenses. Here is what you need:
- Taxes - These vary from state to state and Texas has higher property taxes than other states. Zillow provides a quick source, but maybe not the most current. In almost every community, you can also look the tax rolls up online and get the EXACT number
- Insurance - Galveston is in a hurricane zone. So, your insurance might be much higher than the national average. Call a broker and get a quote so you know the EXACT number
- Vacancy - This has to be an estimate. I usually use 8% of rent, but that is probably on the conservative side.
- Ongoing Repairs - These can be highly variable, but in my portfolio, long term, I was spending $150-200 per unit per month.
With about 2 hours of work you can be sure the numbers are spot on. If they still look as good as the estimate, I'd buy it.
@Steve Martinez, hmmm. What if the Lender only grants a 20 yr loan? What if vacancy turns to to be 8% (or even more)? What if the repair estimate is not conservative enough? What about property management expense? Utility expenses? What if $1,200/m rent is not achieved? (etc?)...
Arguably, not enough added equity to allow a Refi to get ones deposit back.
[ie. Leaving $35k in the deal for the foreseeable future means: Not really a no brainer]. Cheers...