Please Validate My SF Rental Calculator

[Saurabh Kukreja]

I am trying to analyze deals these days and came across this 4 square method.

According to these numbers even with 1% rule, I am not able to get 200 per door per month.

Is this what your guys' numbers look like? Can I call a deal good if I am not even making 200 per door?

[Allen L.]

As long my as rentals cover their theoretical expenses (or like a few hundred dollars negative), I'm fine. Most of my new acquisitions have 20 year amortization and higher interest rate because they're commercial loans so obviously cash flow goes down. My goal is simply to BRRRR and make equity long term, so loan to ARV is probably 85-90%. I would not use % for capex. You should figure out how much it cost to replace each component of a house in your area using builder grade material and the lifespan of each component. This is a good exercise in real estate fundamentals as well as you get to know how much things cost so you don't get ripped off. For my rentals I have a sqft multiplier and a # bathroom multiplier because obviously more sqft or more bathrooms equals more capex and maintenance. My rule of thumb after doing this calculation is ~225-240 per month in capex and maintenance.