Is 30% for Vacancy, Repairs, and CapEx a safe estimate?

[Joshua Hollandsworth]

I know this is a very BROAD topic. The situation varies from deal to deal. I am just looking to see what you guys do when analyzing expenses.

[Andrew Johnson]

Joshua Hollandsworth I run around in the commerical multifamily world. Therefore, I just ask for a T12 and double the variable expenses. I always want to be conservative and assume they are unreported. I also look at average life spans of roofs, HVAC systems, kitchen cabinets, etc. and basically plot out (based on age) an educated guess as to when that expense will come due. Rather than using 10% for cap-ex I ask myself: "How much money per-month will I have to save so the property can self-support (ie: pay for) that capital expense?" The downside is that it shifts overtime but I would always err to get a property to self-support so I don't have to come out-of-pocket for cap-ex. I doubt anyone would say my odd method is "generally accepted" but they don't write the check when the HVAC system dies!