All Forum Posts by: Sara Conner

@Zach Lemaster I have a phone call with Tommy tomorrow

@Zach Lemaster okay here is an example of one that I just ran. It comes from the rent to retirement website. This particular property is in Indianapolis. They state there is a 16% ROI. Price is 153,000. 3 beds 1 bath. Class C neighborhood. Currently leased. 25% down. First year no PM cost. (After that I would factor in 8% so that is what I put in BP calculator for rental properties). Closing costs will vary. So for fun I put 5%. Rent is $1330. Annual property tax $451. No HOA. Annual insurance $850.

Bigger Pockets calculator asks the following:
Purchase Price: 153,000

closing costs 7650 (5%)

20% down 30600

Interest rate 6.5% 30 year loan

Rent $1330

Property Taxes 451/yr

Insurance 850/yr

CapEx 5% ($66/month)

Repairs 5% ($66/month)

Vacancy 3% ($39/month)

Management 8% ($106/month)

Leave utilities blank assuming the tenant puts them in their name, BP calculator gives me 5.33% CoC ROI, which is better than what I originally did. I changed some of the numbers, like putting 20% down instead of 25%. But where do they get a 16% return from?

Thank you for that insight. I’m currently reading Dave Meyer’s book on deal analysis and Brandon Turner’s book on rental property investing. Hopefully I’m able to find something so I can pull the trigger on my first deal. 

Hi everyone,

I am brand new to all of this. Currently in the information gathering stage. I'm looking at properties with Rent to Retirement. The numbers on their properties look good. But when I check them against the bigger pockets calculator, I come up with negative returns. In fact, every property I look at comes up with negative returns on the BP Calculator. Am I doing something wrong?