[Calc Review] Help me analyze this deal

[Marvin Z.]

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Hi all, just interested in getting feedback on a deal I'm looking at. I used what I believe are conservative assumptions for the area:

0.5% rent growth

0.5% prop appreciation

Vacancy/R&M/Capex each at 8%

Mgmt at 10%

I confirmed property taxes online and insurance quote is a high estimate.

I also added in some immediate repair costs for items like replacing AC condenser and possibly some roof work.

The deal will be all cash upfront, but I would expect to do an immediate cash out refi to get 75% of my purchase price back, leaving 25% down in the deal.

Thoughts and insight are appreciated!

[Marvin Z.]

Thanks, let me retry with the brrrr calc. 

I believe youre referring to the 2% “rule”?

The deal appears to cash flow well which is what made it attractive to me. I’m not nearly as bullish on the appreciation side of deal, as I factored into assumptions. 

You’re right that the neighborhood seems like a solid C area. This prop specifically is in Tulsa OK. I’m still learning more about the area to find out if this is a location I’d like to invest in. 

Thanks for the insight!