[Calc Review] Help me analyze this deal

10 Replies

@John Vail The only thing I would change is taking into account the cap ex and maint expenses.  I see you have some vacancy in there, but even if you plan to manage it yourself I'd still include the management fee so that you understand what the numbers will be once you do have a manager.  I usually use 5% for each maint and cap ex, and then not sure what the going rate for prop management is in your area, but even 10% is a good planning cost at least from where I am at.   

It seems like a good deal to me. Are you pretty confident you can get that rent? I agree with the other commenter about figuring in property management just in case you tire of managing yourself. 

Add 10% for management costs if you plan to have professional management -leases,collecting rent, inspections, handling tenant issues or evictions, etc.

I don't know condition of house or your area, but 5% is an appropriate expectation for maintenance and vacancy costs. Any capex items coming up soon? Factor that in monthly.

I'm surprised the insurance is that low. Might be due to region differences.

Overall looks good on the surface

Originally posted by @Brook Rieman :

It seems like a good deal to me. Are you pretty confident you can get that rent? I agree with the other commenter about figuring in property management just in case you tire of managing yourself. 

That Rent is median for the area based on the BP rent tool... its $400 lower than other 3/2 in the area (3/2= $1500 1/1= 1100 )So it’s an assumption. As I’m still analyzing looking for my first deal. Are my assumptions off base should they be lower?

 

@John Vail , who's giving you 3.3% Interest Rate for 30 years, on an investment property?

And yes, you should account for a Property Management Fee of ~10%, simply because it won't be "free" for you to manage, even if you don't use anyone else.

And yes, you must allow for Capex, averaged out between 5-10% per month.

And most folk recommend around 7% allowance for Vacancy, rather than your 4%.

ie.  Imho, your numbers appear too starry-eyed, and need to be more conservative.

ie.  It might not be the ideal deal you're hoping for.  Welcome to BP.  Good luck...

Just so I understand, other places are renting for: 1100-1500? Your calculator shows you plan an income of 2500.



Originally posted by @Brent Coombs :

@John Vail, who's giving you 3.3% Interest Rate for 30 years, on an investment property?

And yes, you should account for a Property Management Fee of ~10%, simply because it won't be "free" for you to manage, even if you don't use anyone else.

And yes, you must allow for Capex, averaged out between 5-10% per month.

And most folk recommend around 7% allowance for Vacancy, rather than your 4%.

ie.  Imho, your numbers appear too starry-eyed, and need to be more conservative.

ie.  It might not be the ideal deal you're hoping for.  Welcome to BP.  Good luck...

@Brent Coombs

This is why I posted here. I am using number I’ve seen in recent webinars I’ve watched from BP. Like I said I’m new at this.

So thanks for the input I will rerun the numbers as I’m sure that changes things greatly.

Again Thank you.

@John Vail



 

@John Vail - one area of expenses i am finding out is lawn care - as this is a multi family , I think lawn maintenance might fall on you- so things like mowing, fertilizer, anti weed etc should be accounted for. I would add at least $35 per month professional lawn services in your calculations.

Thanks

Parag