[Calc Review] Help me analyze this deal

10 Replies

I would bump that CAPEX budget up. The lowest I have used is $200. But with work coming in at a premium, I may even go more than that depending on the cost of labor in your area. The Cash on Cash is pretty low. But it has decent cash flow.

@Greg Gangle - numbers look good to me. I disagree with raising CapEx…...you're already at 8% and you're doing a $65k renovation. If you do things properly, you shouldn't have capital expenditures for a while. Saving 8% monthly should suffice. Good luck!

@Greg Gangle

Keep in mind that the BP calculators are U.S.A. biased/specific.  Financing (from originating fees to how interest is calculated and financing terms) will be different here.  {I see that the calculators are still {incorrectly} classifying CapEX as an expense}

When modelling a project like this, I tend to be very conservative {upside surprises are more enjoyable than downside ones}.  While I would keep the 3% growth rate for expenses, I would assume a 0 - 1.5% revenue (aka rent) growth.  Our specific markets are all cash-flow and forced appreciation plays, so I would peg market appreciation at 0% (sometimes even negative 1%) and never more than the rate of inflation.   If you are in a market (southern Ontario, Charlottetown) experiencing substantial market appreciation, then modelling an early exit based upon price growth is a viable exit.