Estimating Costs in Chicago rentals

[Ross Cosyns]

Hi BP,

I'm new to the community and just wanted to thank you all for being so open and generous with sharing information. I have spent a lot of time exploring the site and forums, and have already learned a ton and gained some really good insight into the Chicago market. 

In the next 6 months or so I plan to start buying 2-4 flat units in certain areas of Chicago, rehab them and either sell or refi-hold. To get started, I've been putting together my own spreadsheet to pro forma deals. One thing that I've had trouble pinning down is cost for purposes of coming up with an accurate NOI. I've read about the 50% rule but I tend to think this may be underestimating true cost.

Do you all have any other better methods or advice?

Thanks!

[Dorothy Wulf]

It's definitely important to have a good Realtor run the comparisons for you if you are planning on buying and flipping and also run comparisons if you are buying and holding. Principal, interest, taxes and insurance is different for everyone and for each property so it's important to know that number,then consider your expenses, and of course your rental prices to determine more of an accurate NOI.