Am I doing my rental analysis right?

[Austin V Nguyen]

Hello I am currently a 21 year old trying to practice doing rental analysis on rental properties mostly on duplexes and some SFH. I found a multi-family home on homes.com and here is the link. https://www.homes.com/property... I did an analysis with the bigger pockets rental calculator and it says the monthly cash flow is $730 a month and the COC ROI is 4.87%. This doesn't seem right because I watch Brandon Turners real estate videos and the COC roi should usually be in the 8% - 12% range, but 12% is where you should be aiming for. How is it that the monthly cash flow is so high, but the COC roi is so low? am I calculating something wrong? Here is what I put in the calculator -

- 20% down of $220,000 so my down payment is $44,000 

- Purchase closing cost of $4,000 

- The mortgage rate of 4% with a 30-year term loan 

- Property management fee of 10% a month 

- The rent charged for a month $1,650 

- Property tax $220 a month 

- Insurance $77 a month 

- Repairs maintenance a month 5% 

- Vacancy rate a month 5% 

- Capital Expenditure rate a month 5% 

- The tenants will pay electricity, sewer, gas water, HOA fees, and garbage

Can someone tell me If I miscalculated something or did something wrong? It is a duplex property in Houston, tx with 4 bedrooms

[Tim Herman]

@Austin V Nguyen even with your optimistic soft cost you only net $1200 per year on an investment of 44k dp and $6k closing cost. 1200/50000=2.4 cash on cash return. Vacancy of 5% is your tenants staying an average of 20 months. Capex of 5% won't cover what you need to save. Floors have a 10 year life span. Assume 1000 sf of flooring per unit. My area it is $6 sf to replace. 2000 sf*$6 sf=$12000/10 year life span/12 months in a year=$100 per month. 1 item already exceeds your capex budget. My capex budget also includes roof, appliances, hot water heater, hvac,bath and kitchen remodel. I use a minimum of 10%. Take another 8% off cash flow. 210/50000= .4 %.Cash on cash. A quick way to analyse properties is using the 1% rule. Monthly rent divided by 1%. $1650/.01=$165000 max purchase price.