All Forum Posts by: Jordan S.

Concrete is far nicer than asphalt.  It looks better, doesn't stink and has less maintenance, but as you said costs more initially.  Plan on 30-100%+ price premium depending on your existing conditions, contractors and location.  

There are many variables to both options so make sure you get options from reputable sources.  I've seen both last for decades with minimal maintenance and both fail nearly immediately when poorly executed by inexperienced contractors.  Preparation is definitely more involved in concrete work and bad work is harder to fix.                         

If you find asphalt coming in the same price as concrete flat work, question your contractors as something is likely wrong.

You could also do a combination of both concrete and asphalt.  Using concrete in the areas closer to the building may enhance the curb appeal (stamped concrete can look incredible) while using generic asphalt further out to reduce your costs.    

Brandon Turner at BP mentions all the time that his metric for analyzing a property is that he wants 12% Cash on Cash and $100/unit cash flow....

In trying the exercise of applying Brandon's requirements using the BP calculators to some potential deals, the Cash on Cash (CoC) return is typically coming in really low and I am assuming the CoC value that is returned in the report is for year 1 only....is that correct?

If that is the case, does anyone know if Brandon looks for a CoC of 12% for year 1 only, or as an average CoC over the period the investment is held? While the CoC may be low in year 1, it does go up quite a bit after year 10. This distinction makes a huge difference in how an investment may be interpreted.

Secondly, why is IRR not included in the BP Calculators or is it and I am somehow missing it?

Thanks,

Jordan

Hi, 

What does everyone do in the calculators for PM fees, CapX fees, Maintenance etc?

I'm familiar with all of these but curious what others are using for default rough percentages/numbers to analyze deals?

Do you all include the 10% property management fee on all deals, even SFR or <4 unit buildings that will be self managed? Or do you only factor in the 10% PM on deals that will be in fact managed by a PM.

Thanks