What are your default Expenses used when Analyzing Properties?

[Joseph Hoot]

I have been analyzing properties for the last 8 months without making a just yet-- We've been busy doing many other things.  However, we're finally at the point where we'd like to start making offers.

At the moment, I first calculate using the typical BP rules-- 50% rule, 2% rule (I allow them to go down towards 1.25%), 70% rule with flipping estimates, $100/month/door, etc...  But then I go to the next level to attempt to be a little more accurate.  Some properties tend to look like they need lots of work.  Others, not so much.  Plus, taxes seem to range a bit.

I've heard @Brandon Turner talk about including property management with your analysis from the start, so you can easily start using a property management company and not impact your original pro forma estimates. However, given the current market (at least my amateur understanding of it) it seems that some MLS listings are difficult to make my numbers work unless I adjust my numbers slightly towards maybe 5% property management costs, with the assumption that I would be managing the property.

So I'm curious what metrics other investors are using when analyzing a property.  Additionally, when talking "Cash on Cash" and Cap Rates with other investors, is it typically assumed that a Cash analysis on Cash includes the types of expenses I list below?  Also, with Cap Rates, is it assumed to be calculated based on Purchase Price or Fair Market Value?  

Here are the ones I default to and adjust slightly, depending on the property class and area (jobs, distance, etc..):

• Expense, Income, and Appreciation Rates = 1% (I prefer to not bet on any of these. So I feel 1% allows me to account for a little adjustment)
• Vacancy Rate = 11%
• Closing Costs = 2%
• Selling Costs = 6%
• Cleaning and Maintenance 0.8%
• Property Management = 11%
• Repairs = 8%
• CapEx = 12%
• Taxes = 1.2% (I tend to adjust this one frequently, but this is my default)
• Insurance = 0.5%
• Other Expenses = 0.1% (my flex money as a "just in case")
• Initial Renovation Costs = $500