All Forum Posts by: Brian Jolliffe

@Brian Burke @Ben Leybovich

Thanks for the responses!

@Chase Louderback

Yes, I inspected every unit and building during due diligence in early February.

Brian

I am closing on a 63 unit complex shortly and am looking for thoughts on how to handle the final walkthrough prior to closing. Walking every unit is likely not feasible. Here is what I am planning to do:

-All property exteriors and grounds

-All building basements and crawl spaces

-All mechanical rooms

-All vacant units

-All laundry rooms to verify all equipment is functioning

-Sampling of 8 occupied units  of varying condition

I have been using a rental analysis spreadsheet I put together for awhile and I'd love for anyone to pick it apart to find flaws or suggest improvements. Green tab worksheets are the active input worksheets, yellow cells are user entry. The rest auto-calculate. The capex worksheet was from someone on here (sorry - can't remember who) and I added more logic to it.

https://drive.google.com/open?id=1g_k4hXi08_GE48vDMNh_xOU9eojwOvjx

The term "cash-on-cash return" doesn't seem consistently defined. I'm curious if people are typically using operating (no capex reserves) or free (with capex reserves) cash-on-cash returns when evaluating deals as it relates to the 10-13% cash-on-cash minimum that many target. There's can obviously be a big difference between the two methods. Free cash-on-cash seems to make the most sense to use as it closer reflects reality.

https://www.investopedia.com/ask/answers/111314/whats-difference-between-free-cash-flow-and-operating-cash-flow.asp

Buy based on actual. Every deal needs value add. You can’t add value through rent increases if you pay the seller for market rents.