Originally posted by @Ray Johnson:
@Alex Price First you must recognize that at the level you're discussing, the business models will be using a cashflow range because they are using IRR scenarios and not the simple calculators found on BP. When I was analyzing deals in the Private Equity sector, I saw everything from 26% - 42% IRR needed depending on the size of the company managing assets, additionally how many Management/Fee company's are factored into the business model and at what point in the expense model they're collecting fees.
There are payroll, Marketing, Office space, etc... now a part of your business model, acquiring an asset for cashflow becomes a small part of your equations.
Every acquisition will be considered as to how it affects EBITDA, With that said, there is no easy answer to your question, a true quantitative and qualitative analysis will look at these metrics all the way down to the region and tax advantages of the area in which your company is held.
Maybe you can be a little more specific on your question.
If I'm using traditional model for 1-3 units and outsourcing management at 10%, after collecting rent (let's say $1,000 per month per unit), mortgage, taxes, insurance, vacancy, maintenance and management, I should be able to cash flow around $300 depending on taxes at 100% occupancy. I know that I can't use that formula with internal management and staffing (leasing, management, maintenance, etc). What formula should be used or should I say is there a common rule for investing at that level for cash flow?
