[Calc Review] Help me analyze this deal - HELP!!!

[Brittney N.]

Hello All,

I need help!!!! How do you investors make your numbers work when using a HELOC as a down payment!!!! I am newbie to Multi Family investments and I just don't understand where these "good deals are coming from".

I see so many posts that say leverage a HELOC for a down payment on a rental investment property but every time I run the numbers the ROI is less than 2% and even negative. I am using the Rental Property calculator and have run multiple scenarios and still have yet to find a scenario that makes a purchase worth while. The purchase price of duplexes and quadplexes seem good on the surface but once I enter them in the calculator it's non favorable. How are you investors able to get favorable numbers WITH taking in account a HELOC payment and mortgage payment.

Example attached (link below) and inputs assumptions below. Please note all my assumptions are very conservative since I am a newbie.

Asking Price/Purchase Price: $172,000 (assuming full price for worst case scenario)

Annual Taxes: $3500

Closing Costs: $5000

Est. Repair Costs: $2500

Down Payment: 25%

Interest Rate: 6.1% - 30 Years Loan

Rent: $2350 (current)

Water and Sewer: $150 monthly

Garbage: $100 monthly

Insurance: $200

Other: $275 (this is my HELOC payment assumption)

Vacancy: 5%

R&M: 7%

CAPEX: 7%

PM Fee: 10%

Annual Income Growth: 2%

Annual PV Growth: 2%

Annual exp. Growth: 2%

Sales Expense: 9%

View report

*This link comes directly from our calculators, based on information input by the member who posted.