[Calc Review] Help me analyze this deal

3 Replies

Hey Michael! This calculation looks pretty good. You expense percentages seem to be in the right ballpark, and while I would like to see a higher cash flow (I try to shoot for $150 per unit/month), you are certainly there in terms of Cash on Cash Return. One thing I would recommend is adding to your rehab costs. I see you have $5,000 and that may work, but I feel that $10,000 minimum would be closer to the ballpark. Again, that is completely up to your inspection and what you or the inspector finds. I would also include a misc. expense category so you are able to have a cash reserve on hand to fund those different expense budgets if they start to become too small. Good luck and happy investing!

@Michael Kelley

I would pass on this deal.

A toilet costs $150-$300 and that’s considering you install it yourself.

Not enough cash flow to cover any unexpected expenses. And, if the market crashes and you have to lower rent to keep it occupied you will probably start losing money.

Hope this helps!