Business Plan/Loan Proposal Analysis Values to Use

[Artem Lopatchenko]

Hello BP,

Hoping that someone on BP can give me some insight. I need to start shopping local banks/credit unions to secure financing for my (hopefully near future) rental property purchases. As part of the proposal, I am including my business plan, which includes my investment criteria. I am having some difficulty determining what should be used as a CapEx value. Thus my question, I know that 50% is a proxy used for OpEx, however what proxy is used for CapEx? Also, what does the 50% for OpEx include? Does that cover RE Taxes? Insurance? Is CapEx covered in OpEx?

So for instance, can someone help me analyze a $77,000 property that has rents of $1,200? If it helps, I am analyzing deals in Fairfield County, Connecticut. I want to make sure my math is right before I finalize my criteria.

Thank you 

[Scott Carder]

I really don't think your business plan matters to the bank. They want to know if you can afford the place, even if the tenant doesn't pay, and if you have a history of paying your bills on time. That's been my experience anyways. I have never given a banker a business plan.