[Calc Review] Help me analyze this deal

4 Replies

Tim- it is two properties on one plot. One is a 3 bed, 2 bath and the other is a 2 bed, 2 bath. I pulled the taxes straight from realtor.com- should I go about it another way? Thank you so much for responding.

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@Patrick Cianchetta need to learn to tag people if you want additional info or to thank them.  Use the @ sign and start typing their name. on a computer their name will appear and you click on it and it populates the comment box in blue and then they are notified. 

To get the true taxes go to the assessors site of the county it is listed. There might be a homeowners exemption that you won't get if both are rented. Unlikely insurance on 2 structures will be only $88 per month. Call some independent agents for a quote. After awhile you will get an idea what the insurance will run.

How did you arrive at your repair and capex costs? A %. That is a quick way to analyze properties. The more accurate way would be to estimate how many service calls your property will need each year(i average 1 per year per unit) and the cost to repaint between tenant turnovers. Capex(the big stuff), each have a lifespan. Roofs, floors, appliances, hot water heaters, hvac, exterior siding or paint, etc. There are spreadsheets that you just input the cost of each item and it will spit out a number of what you need to save per month. An example. Floors. Look at the commercial warranty on flooring. Most are 10 years so I use that as my lifespan. Assume 1500sf of flooring in the 3bed and 1000s in the 2bed. My area it is $6 sf to replace. 2500sf*$6 sf= $15000/10 year life span/12 months in a year= $125 per month for 1 item in a capex budget.

@Tim Herman thank you so much, that makes sense. Okay so reaching out to assessors is a good way to get real tax data. I was literally just using what I find on Realtor.com or on Zillow.com. I watched a video from Brandon Turner on analyzing the rental properties so just inputted the same numbers he did overall- to get the initial analysis, then if serious about it I would need to double check everything. He suggested 7% for maintenance, 5% vacancy, and 7% capex. Again, just a suggestion from him, but he really said between 5-10%.

Tim, thanks for the help.