Can I get a second opinion on this rental property analysis?

[Brad Chatman]

Hi All,

I'm working with a house flipper/property manager and considering buying some of his properties.  in his pro forma he shows this property at a 20.87% cash on cash return based on his assumptions; however, when I run mine I'm getting 7.91%.  

We are differing on the utilities, maintenance, capital expenditures, and vacancy rate.  

This is a newly renovated property. 

Can you have a look at both of these worksheets and let me know if you believe any of these assumptions are off from a general rule of thumb point of view.  I just started researching real estate investments about two weeks ago so my numbers could easily be off.  

Any help on this would be appreciated.  

Thx!

Flipper/property manager anlysis

My analysis

[Jeffery Griggs]

Hi Brad. Welcome to BP. Your assumptions on vacancy rates & maintenance are more conservative that the the proforma. That is good and more in line with what I would use. You are also wise to add in the capex from the start. 

A question that I have is why are you paying the utilities and landscaping? I would have the tenant pay those. I would include clear language in the lease that states their responsibility for the lawn & snow. If you remove these from your calculations the COC is 13.9%