How do these numbers look to you?

Question

I was looking online numbers are all over the place I’m going to try to post this picture and tell me how these numbers look to you. First income property we’re closing on and I rounded everything up and out worst case scenario rent price.

Account Closed · Answer

@Robert S. Hi, just looking at First Year Income and Expense - are you self managing or hiring a property manager (PM)? If PM you'll need to add 8-10% of your monthly rental income to cover this. Also you should include Cap Ex figures which can vary but maybe 6-9%. Hope this helps

Jon Kelly · Answer

@Robert S. IRR of 20% and Cash-on-cash of 1,000%+ looks good to me! Definitely add 5-10% for Capex depending on the year the property was purchased. I would consider adding a property management fee (8-10%) even though you are self-managing. If an additional 8-10% turns this solid deal into an ugly one, maybe it's not the best one. Even though you won't pay yourself to manage, it's still important to track how much you are saving from self-managing.

Account Closed · Answer

@Robert S. Yeah putting money aside for CapEx is critical. It is your reserves in case big systems and components in a house need replaced. Furnace, roof, etc. You can go lower in your % for CapEx on newer properties generally

Robert S. · Answer

@Jon Kelly

Thanks will do that regardless I don’t believe we will lose on this deal we purchased decently under estimated value as it stands but it’s getting our toes wet in the investment real estate pool. So will take this as a learning opportunity and try to do better each time after.

Robert S. · Answer

@Justin Schreibeis

Yeah will do that for sure thanks. We’ll see what I can rent it for after the remodel hopefully that jumps to at least 1200 which I believe will be doable. Then I guess I will see that it appraises for when we try to pull the money out.

Robert S. · Answer

@Justin Schreibeis

Yeah I noticed the cap on the bigger pockets calculator and no we will manage it our selves for the first couple properties we purchase.

How do these numbers look to you?

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