[Calc Review] Help me analyze this deal

[Bobby Hermosillo]

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[Jaysen Medhurst]

@Bobby Hermosillo, first question off the bat: What kind of property is this SFR or MFR? If MFR, break out the rents in your analysis. If SFR, I'm skeptical of your rent expectations.

As far as your analysis:

• Vacancy is WAY too low. I underwrite to 5% for SFR and 8% for MFR.
• Repairs and CapEx also WAY too low. I use 15% combined. Depending on what's in your scope of work for the reno, you may be able to lower this for the first several years. If you plan to hold long term, you should plan to gradually increase. Overtime it all equals out.
• What does the electric bill cover? If this is SFR this will be paid for by the tenant.
• Water/sewer: again, if SFR this is tenant paid. If MFR, I usually expect $30-40/unit/month. Check with the local water authority.
• Management of 3% is a pipe dream. Good management costs 8-10% depending on the property unit count and the total number of units you have with the PM.
• If you're more than doubling the value of the property, you should expect your taxes to go up proportionally at the next assessment.
• Insurance will likely go up as well.
• Any lawn care/landscaping required?
• What about professional/admin fees?

Tighten up your analysis and see how the numbers look. This certainly may have legs, especially if you can pull all of your money out at refi.