Please test out my deal analysis spreadsheet - feedback requested

[Kevin Chan]

Hi, I adapted Brandon's spreadsheet into a different format. Please check it out and let me know if there are any mistakes in the calculations or modeling.

My goal is to use it to evaluate foreclosure deals and to determine max bid.

Two different versions - one to evaluate Max Bid for foreclosure auction (tweak target discount rate) and another where the price is known.

[url]http://www.biggerpockets.com/files/user/Kevinhpchan/file/rental-vs-flip-analysis

Thanks

[Daren Wang]

Dear Kevin,

Thanks so much for posting this functional excel table.

I understand that you not include operating expenses in the calculation of Cash outlay, but have little trouble to understand excluding tenant acquisition expense, could you explain? You place this expense as one month rent, is it your own experience?

And also what are the elements constitute your Total Holding Cost (G15)?

Thanks!!!

[Kevin Chan]

Thanks Daren. Btw I'm entirely new to the landording and RE investing business so it's all based on assumptions I've made from other analysis I've seen on other spreadsheets or read somewhere.

The reason i'm excluding Tenant Acquisition is i'm assuming that just comes outs of the 1st month's rent when using a Property Mgr to find a tenant, not a separate payment - I guess I should probably include a field for general marketing expense.

Thanks for the feedback

[Kevin Chan]

Holding cost could be utilities and other expenses. I read somewhere that an estimate would be 0.5% per month.

[Bryan L.]

When I first started, I developed my own deal analysis work-sheet. After a while and after I completed a few actual deals, I found that I could analyze a deal without the worksheet, just walking through the house. You will probably reach this point too. I've found that most basic foreclosure deals in my area are going to need 10K to fix (includes closing costs and carrying costs). Basic painting, flooring, and all minor repairs are included in this 10K. I then start adding other items such as replacing windows (250 each), roof (5K), HVAC (2500 to replace a unit, 5K to install unit and duct-work from scratch), etc, etc,. Then, I just work a conservative ARV times 0.7 and subtract my "repairs".