Analyze my first duplex off the MLS

[Christopher Hunter]

Hello BP,

I am looking to start learning about duplexes, triplexes, and quads. I am an agent and have access to the MLS. I took a look at the BP analyzer and I do not have all the numbers to fill in the boxes. The biggest question is where do I grab the expense numbers from. I can find the local rents from Rent-o-Meter, I have watched and read stuff from Branden Turner. I just need help putting the puzzle together. Please advise.

Thank you

[Tim Herman]

@Christopher Hunter Are you looking at the soft costs, like vacancy, repairs and capex. For me I use 8% or 1 turnover per year. Most use 5% or 1 turnover every 20 months. Due to covid and can't get paid for 6 months your 5% means you have have a tenant in for 10 years before another turnover. 6 months vacant/120 months = 5%. For repairs the minimum I use is $50 per month. If you are in high cost of living area with corresponding high cost of repairs then increase the dollar amount. I want to have enough money set aside to do minor repairs ie toilet clog and enough reserve to paint on tenant turnover. You can usually touch up if paint less than 3 years old. Normally I use 5%. Now capex is the silent killer of investors. I use 10%. These are just some items in my capex budget, roof 25 year life span, floors 10 year life span, appliances and hot water heater 12 year life, hvac 20 year life span, bath and kitchen remodel 20 year life span,etc. 

Capex can never go down only increase. Say its costs $7500 to replace a roof. $7500/25 year life span/12 months in a year=$25 per month. This is if it is brand new the day you bought it. Assume roof is 15 years old so its useful life is now 10 years. $7500/ 10 year life remaining/12 months= $62.50 per month for the same item. That is 2.5 times more expensive.