All Forum Posts by: Account Closed

Well, I can't figure out how to get a good shot of it posted.  What I will say is that from what I've read, you want to include vacancy, repairs, and capital expenses into your operating expenses.  At what rates depends on your specific situation.  I calculated them at 10% of gross rental income for each one.  That may be high, but even if I drop those costs to 5% each, I still only show a monthly cash flow of $48.  That's obviously better than the loss at 10%, but those are numbers you will have to come up with.  I like being very conservative when I'm unsure of the actual or exact numbers.  And I would assume pool maintenance isn't cheap. 

Not sure of the strategy, but maybe a larger down payment would give you more equity and less of a monthly payment which would help with cash flow if that's what you're looking for. 

I'm not giving advice, just wanted to attempt to run the numbers and see what I came up with in relation to others.  Sorry if I just caused more confusion.

Sorry, I was reading too fast.  I was assuming 4 units @ $600 and 1 unit @ $985.  Corrected for the third time...:

$/Unit: $64,750

Cap Rate: 5.2%

GRM: 7.75

Cash ROI: -35.01%

Total ROI: 46.03%

DSCR: .83

Cash Flow/Unit: $-57/month

Gross Rev - Expenses - Mortgage: $2784 - 1662 - 1349 = $-227

You're not factoring in vacancy, repairs, or cap expenses.  I see maintenance up there, but where are you getting those numbers or at what rate?  I'll try to figure out how to post my sheet.

It looks like you double posted. I posted some numbers on the other one. Would like to know what the experts think of them. 

See, I forgot the water expense.  Here are updated numbers, they seem more realistic.  This also drops the cash flow per unit to only $27/month.

Cost/Unit  $51,800

Capitalization Rate  6.88%

GRM 6.38

Cash ROI (COC) 21.15%

Total ROI 102.19%

DSCR 1.10

I'm new to this, but I really enjoy playing with the numbers. I'd like to provide what I came up with and see what the experts say. Below is based off the numbers you provided and while I think they look good, I only show a monthly cash flow of $77 per unit, which I think most would consider low. As far as the Cash ROI, that is based off of about a 3% down payment which I derived from your stated mortgage payment at 5% for 30 years. That may not be completely accurate depending on what your actual cash outlay is and seems artificially high. Although, with no stated improvements or closing costs, you have a very small cash outlay. I also factored 10% of rent for vacancy, repairs, and capital expenditures (all separately). It looks like your PM fee is approximately 9.5%, which is also figured.