Newbie getting started!!! Help me analyze this multifamily deal

[Account Closed]

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[Kevin S.]

@Account Closed Since you didn't provide any information on the age of the property, your reason for choosing certain expense percentages, etc. I'm just going to use the normal assumptions for cost that I use when assessing a property. Overall I'd say you've definitely understated your expenses, you'll want your Vacancy to be around 8% as that gives you 1 month of rent saved each year (1/12 = 8.33%), CapX should be 10% (not 2%), typically management companies charge about 10% (not 5%), and repairs should be at 5%. Overall that's an increase of 19% or $2,155.55 which makes your property negatively cashflow. Now there may be some mitigating factors that could push some of those percentages I listed down a bit (or maybe there's a chance to increase the gross revenue by increasing rents), but overall this deal looks marginal at best to me.