Not Believing BP's Rental Calculator

[Ryan M.]

So I am getting pretty frustrated here. Every property of the 20-30 I have looked at has been bad deals.

For example check out MLS number: 72154014. It's a property I would be interested in buying, but at the price it's listed at, there is no way. Even if I lower the price 20k it still will be a negative cash flow each month.

I put 1500 for closing costs, 5% interest.  5% vacancy, 5% repairs and maintenance, 5% capex and 8% property managment fee.

I get that @Brandon Turner in his podcasts says, "find the price that makes it work" but the Boston market is very hot, and while this is Nashua NH, many many people buy in NH and commute to Boston area jobs every day.  People aren't lowering their prices 20,30 or 40k.  They are getting offers over asking price and bidding wars occur.  Now, this might not be happening in Southern NH and Northern MA, but inside of I-495 it's happening all the time.

So am I doing something wrong here?  Are my expense numbers correct, too low, or not high enough?

Seems like I am spinning my wheels with this ****.

What makes it even more frustrating is I have a mentor who is claiming some of these properties are home runs (guy owns 300 doors and knows what he is talking about) but he does quick numbers like Cap rates, Gross Income Multiplier, and quick 35% "extremely high" overhead before P&I.  He's saying he'll go in on the deal to prove to me it's a good deal, but yet the BP calculator is saying the exact opposite of what a guy who makes a **** ton of money per month is saying.  So, as you can tell I am very frustrated and starting not to believe in this BP calculator.  

Someone show me the error of my ways.

[Cody L.]

The easiest way I've found to quickly determine if a property makes sense is to not pay more than 100x it's monthly rent.

Brings in $2,600/month? I'll pay max 260k

But that 100x monthly is if I like the property and location. If the property needs work or is a bad area I adjust. For example I just bought a property 6-7 miles from my "location I like" but paid $6m for $120k/month of rent roll.