[Calc Review] Help me analyze this deal - Newbie/Rookie Investor

1 Reply

Base numbers seem fine. My point of concern is in Capex. The conservative way to budget Capex reserves is to look at estimated remaining useful life of each item: roof, siding, windows, kitchen, HVAC, water heater, bathroom, fences, gutters, chimney linings/tuckpointing, foundation items, etc, and assigning a replacement cost divided by remaining useful life.

From there, your vacancy implies a turnover with one month down every 2 years, roughly.  Your maintenance budget, assuming nothing else goes wrong in 2 years, covers a $4,100 turnover cost.  That is fairly healthy in my experience, but this also looks like a large home.  And in my experience if this is a C/D area, your tenant base is more likely to be much harder on the property than an A/B area or tenant base, so your turn over costs could be higher.