Goals and Strategy for Deal Analysis

[Nader Hachem]

Hey all,

I've been doing some deal analysis to find my first property by looking for SFHs in the midwest (Michigan) on the MLS. My goals for this property is a 8%-10% ROI with $150 cash flow after expenses and savings a month. When running my deal analysis, i put aside ~21% for vacancy, CapEx and repairs, then another 10% for property managers. I am not going to start off using a property manager since i'll only have one property, but i want the deal to still make sense when i do end up getting a property manager. What guidelines and goals do you guys use for your property analysis? How much do you guys put down on your properties to begin with? i'm aware properties require 15-20% down depending on the lender for investment properties

My bigger goal is getting over the hump and getting that first property - rather than having amazing cash flow. With that being said though, i don't want to rush and end up with a bad deal 

[Drew Sygit]

Historically, investors have used vacant rate of 10%, but with current low inventory expected to be a problem for 5+ years, many now use only 5%.

Maintenance will vary between 5-20% depending on the the amount of deferred maintenance and property/tenant class.

CapEx wouldn't worry about on an SFR.

What cities are you looking in?

You might want to follow the "Deep Dive" series we're doing on our BiggerPockets blog about Metro Detroit cities and City of Detroit Neighborhoods:

https://www.biggerpockets.com/...