VA Loan. Estimating Expenses and Cash Flow

[Victor Wasson]

Hello everyone,

Preapproved for 200,000 VA loan. I would like to use to fund my first multifamily deal by doing a house hack. The problem is multi family in my area seem to be few and far between and seem to be priced too high to cash flow. I am also looking at and analyzing some SFRs in the event I am unable to find a multi-family nearby due to the intent to occupy requirement.

I am wondering if I am being too conservative in my analysis and estimating too much for expenses which is why nothing I analyze cash flows unless it is close to or below 100,000. Anything around 80,000 or below are typically in questionable shape nd ight have a hard time meeting inspection requirements for the VA to approve the loan. See percentages of rents below that I am using for my calculations.

8% Vacancy

10% Property Management

9% Repairs and expenses

10% CapEx

Taxes: basing on previous year.

Insurance: Quote from my current insurance provider. Do most of you get a quote for every property you analyze or use a percentage? Feel like my agent will get tired of quoting so I can keep analyzing deals.

Can the above estimates be reduced for a property that has been remodeled recently and is going for a higher price? Are they even too conservative for the cheaper properties? I would hate to be force to settle on a cheap property and leave 100-120,000 on the table with a no downpayment loan.

Thank you for taking the time. Looking forward to your expertise and opinions.