[Calc Review] Help me analyze this deal

[Justice NA]

View report

*This link comes directly from our calculators, based on information input by the member who posted.

[Brett Deas]

Budget for expenses, there are always unknown things that pop up.

[Tim Herman]

@Justice NA unlikely you can get a loan for4.5% maybe 7.5%. Low down means pmi added to the payment. Unlikely your repair and capex numbers are correct. No PM cost. Good to add them even if self managing. 10-12% of gross. Water and sewer should be the tenants responsibility unless this is a multi family and the landlord is responsible.

[Justice NA]

Quote from @Tim Herman:

@Justice NA unlikely you can get a loan for4.5% maybe 7.5%. Low down means pmi added to the payment. Unlikely your repair and capex numbers are correct. No PM cost. Good to add them even if self managing. 10-12% of gross. Water and sewer should be the tenants responsibility unless this is a multi family and the landlord is responsible.

 Hi @Tim Herman !  I thought I updated the interest.. currently I’m looking at 5.5 to 6% interest rate. The property has undergone all renovations, everything is new. No repairs needed currently. Yes It is a multi family so I added the water/sewer as an expense just in case. Thank you for the tips on the report!

[Justice NA]

Quote from @Brett Deas:

Budget for expenses, there are always unknown things that pop up.

 Hey @Brett Deas , gotcha! I did add some variable expenses though..listed on the report. Are there others you're referring to?

[Tim Herman]

@Justice NA So you did a capex and repair budgets and those are the numbers you got. Here is a simple repair budget. How much to do a turnover + the cost of service calls over a timespan. You have a vacancy factor of 5% so a turnover every 20 months. Plug in the cost to do a turnover. Assume $1500 to repaint and clean the unit. Add 1.5 repairs at $150 per service calls. $1750/20 months = $87.50 per month per unit. This already exceeds what you are saving. One item in a capex budget is floors. Go to your favorite flooring stores and ask what the commercial warranty. Most are 10 years or less, that is your lifespan. Don't know the size of your multi so assume 2000 sf of flooring. My area it costs $6 sf to replace flooring. $12000/120 months lifespan=$100 per month for 1 item. Means you cannot even replace the flooring when it needs it. Still have to find other money for roof, hvac, appliances, hot water heater, bathroom and kitchen remodels.

[Brett Deas]

Quote from @Justice NA:

Quote from @Brett Deas:

Budget for expenses, there are always unknown things that pop up.

 Hey @Brett Deas , gotcha! I did add some variable expenses though..listed on the report. Are there others you're referring to?

 For the first few months or so, until you can get to at least 10K in reserves add extra. but for reference I am very conservative with my reserves.