[Calc Review] Help me analyze this deal

[James Roberts]

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Hello BP forum. We are a design/engineering/build firm located in Sacramento, CA.  Frankly, with the market shift, volatile material costs, risk, etc. we have decided to not build for "end-user clients" anymore and put ourselves in the "client" position.  This is our first BP property report on a real BRRR project that we have access to.  Please look this over, pound us with questions, and let us know where our #s are right/wrong.  We have an investor meeting this Thursday (in 2 days) and would like to get this report polished up as best as possible.  

Thanks in advance.  James

[Tim Herman]

@James Roberts Taxes will be a lot higher due to prop 13. Figure 1.25% of purchase price or $655 per month. Have you run capex and rehab budgets or just guessing what you need to save. Without more information no one can tell if you are saving enough. Are each houses 1 bed/1bath houses or 10 bed/10 bath houses. Each will have a different repair and capex budget. Feds are meeting discussing inflation and expect to raise the prime up an additional 3/4 to 1%. Mortgage rates will follow.  If you haven't locked in a rate expect 8%  or higher in 6 months. A 5% vacancy is the equivalent of your tenants staying an average of 20 months. 5/100=1/20. Unlikely a mid term rental will only be vacant 1 month out of 20.Will you rehab the rooms between turnovers. You realize you will have to bring more money to the closing table. Initial purchase you are taking a 503k mortgage and refi a 490k.