[Calc Review] Help me analyze this deal

2 Replies

@Erin Francis Be prepared to pull cash out of your pocket if this a buy and hold. You are in lala land for expenses. Vacancy of 3% is 1 month out of 33 months. Do you know what capex is? Everything has a lifespan. Use floors as an example. Since limited description assume this is a duplex with new floors. 1000 sf per unit or 2000 sf total. Average life span is 8 years. In my area it is $3 sf for tearout and install. Put $3 sf LVP = total of $6 sf. 2000*$6sf=$12000/8/12 months in a year= $125 per month for 1 item which exceeds your vacancy,repairs, and capex budget. Need to budget for roof 25 year life unless flat roof then 15, appliances 12 year life span etc. Capex is the silent killer of cash flow. I use a minimum of 23% for vacancy,repairs and capex and it might be higher on low rent multis.

Sorry the the late response, this deal fell through and probably for the best. Thanks for the evaluation and being honest about it. I am brand new to investing and there are a lot of expenses that I most likely don't think of, but I appreciate the honest input.