Vacancy, Repairs, and Capex percentages

[Joshua Paul]

Hello, I have been driving more into deal analysis and I am not sure what percentages to use for my evaluations. I'm evaluating deals in the Ogden, UT and Salt LakeCity, UT market. What Percentages Do YOU guys Use?

[John Warren]

@Joshua Paul you will need to speak to some local investors, realtors, property managers or lenders who are knowledgeable about your market. It is important that a first time investor considers these numbers at all, so kudos to you for using them. The issue for a lot of first time investors though is that they beef up their numbers so much that they walk away from great deals so they can "be conservative". I worked with an out of state investor two years ago who walked away from a screaming deal in Berwyn, IL because they wanted to use 10% vacancy, 10% maintenance and 10% CapEx. The numbers would never work, and they missed out on about 150k in appreciation in one year...

Speak to local professionals and use their knowledge to sharpen your pencil.