Running the numbers on Multi Unit

[Wayne Yahnke]

Just curious how everyone calculates multi units? I’m trying to wrap my brain around a best practice for myself.

Do you add %for capex, repairs, etc for each door?

What’s been your experience? Best strategy?

I know property management is per door.

What’s everyone’s experience with negotiating property management fees for multi unit? Say 2-5 unit buildings where the managers are not in site!

[Adam Detig]

Hey Wayne.

I use an excel sheet to analyze every deal. I believe I originally got it from BP's files but have slightly adjusted it as needed.

In general, keep everything (expenses, vacancy, repairs, etc) as percentages. You won't need to worry about per door that way if you just use the total income and use percentages.

My business partner and I use the following percentages (we are located in the East Ten market for reference):

Vacancy: 7%

Taxes: Get actual number. Usually can find it online.

Insurance: Get quotes for actual number.

Cap Ex and Repairs: 15%

PM (we self-manage but you have to budget for it): 8%

Utilities: Varies with property. If you have to pay them, look up last 12 months and average it.

Pest/landscaping/trash: Needs vary with property. Call and get quotes.

We try and keep all expenses under 50%.