Financial Assumptions

[Jason King]

Hi All,

I am a new prospective investor and I am putting together some information for a partner so that we can start the search for our first property! One of the to-do's that I am personally tasked with is to develop a way to analyze potential investments for financial opportunity. I have been researching methods of measuring deals, and I have found that the BP Buy 'N Hold Calculator seems to lump all of the major financial calculations into one, easy-to-use form. Does anyone have any real-world experience using this tool? Has it worked well for you? Is there anything missing?

It also seems that some of the expenses recorded are based off of assumptions. Specifically, Vacancy, Repairs and Maintenance and Capital Expenditures are the three biggest risk areas in my mind in terms of using the correct assumptions. Does anyone have any suggestions on where to find the correct values for these assumptions? Are there industry guidelines to use? I know that these are likely to be area/property specific, but are there any resources I can utilize to research typical rates in my area? I am also curious to see if I can find what they typical Cap Rates are in my area, if anyone has experience researching this.

Any help would be greatly appreciated!

Jason