[Calc Review] Help me analyze this deal

2 Replies

Many of the expenses you've factored in feel like they need to be doubled or tripled, specifically vacancy, cap ex, repairs and management.  Given the size of the deal I'm guessing this is a larger multi-unit or a higher end vacation rental.  If it's the former, you'll likely have larger expenses for a dumpster, landscaping and snow removal which I don't believe have been accounted for.  There are also likely some common areas where you would be on the hook for some utilities, but this is just speculation on my part since we don't know the exact details of the property.  The financing for a deal of this size may be a little different from what you have projected.  It may come in the form of a loan that is less than 30 years and although a conventional home loan could likely get you an interest rate of 5% or less, if you obtained a commercial loan for this deal it could certainly be higher.

Based on this is doesn't look too good, but again, I may not have the entire picture.

@Brandon Roof

Hi Brandon this is a 4 unit close to NYC so I can do t

A conventional loan. There is no front lawn and a small back lawn. I put snoe removal and lawn care under miscellaneous expenses. Garbage is taken care of through the city via my taxes. I know I will have to pay some utilities but I am going to put four separate meters in 4 Gas and Electric. I can work in a higher Capital expenditures but vacancy is not going to be an issue. You are right though I should make those percentages a little higher. My management fee I only put at 5% instead of the normal 10%. I don't intend to have a property manager just yet I am close enough to the location where is I can handle it. Also everything in the building will be pretty much new. So that is why I don't have capax that high. With this information I hope you get a better picture of what the deal is. Thank you for responding and please feel free to ask me anything else.