How do you underwrite your your deals

[Jaylen Crawford]

How do you underwrite your deals? When ever I analyze properties that cost more than 80-100k they don’t seem to cash flow and if they do not well.

Example Property: 6804 W 15th St, Indianapolis, IN 46214

3 bed 2 bath 1554 sqft

I underwrote this deal as

Purchase price: 125,000

Down payment: 25,000 or 20%

Closing cost: 3,750

Total cash needed: 28,750

Monthly

Rent: 1218

Property taxes: 208.33

Insurance: 50

Property management: 121.80

Maintenance/Capx: 182.70

Loan payment: 477

Cash flow: 68

Cash on cash 2.8%

I didn’t even factor in repair cost which would make the cash on cash return even lower. I also don’t know how much the insurance would actually cost. I increased it slightly based off the information provided by Zillow.

How would you analyze this property? Also do you find it hard to get properties over 100k to cash flow?

[Nick Robinson]

@Jaylen Crawford

The % you use for vacancy depends on the market you are investing in. You can ask PMs or look up vacancy rates and other information on your market. Which you should do before buying anything anyway.