Getting major negative cash flow on deal analysis

[Felicia West]

Hi there.  I’m a new investor and have begun using the rental property calculator on bigger pockets for my market.

I've only analyzed about ten properties so far, but I am getting about negative $1000 cash flow per month for most of the properties and negative cash on cash return. The properties I am looking at are on the MLS because I feel I do not yet have the skills needed for off market deals

These numbers are even with a 25-30% down payment.  I am using 5% for repairs, 10% for cap ex, 10% for vacancy, and 10% for property management.  Are these the numbers you use, or what am I doing incorrectly?  I definitely do not want negative cash flow on a deal.

Thanks in advance for any insight you can give!

[Bradley Buxton]

@Felicia West

The BP calculators are very general and not very market or neighborhood specific. Think of it like a Zillow estimate. There are multiple factors that go into determining rents and if there is limited data the rents will be off. If the subject property is in an area that is highly desirable and the there are no rental comps, the data will be pulled from a distant location that may not be relevant. You can use Zillow and Rent cast to check rents to confirm.
     Also every market is different for vacancy. Some markets there is vacancy data available. For example in Reno, NV the apartment vacancy rate is less than 3% and in ATX I've seen apartment vacancy numbers over 10%.  With any deal analysis there will always be some assumptions and every calculator will has slightly different assumptions.  Areas that the market rents are increasing every year you'll have an opportunity to raise rents. What I like about the BP calculator is that you can easily adjust the number to see where the variables need to be to break even.