All Forum Posts by: Marc V Palmeri

@Doug Woodville I've been doing quite a bit of scenario analysis to see how the assumptions flow through to the bottom line, but here is a summary of what my model looks like now:

2 bed/1 bath condo in Boston.  519K purchase price, 15% down, 4.025% interest, 2% closing costs, 1K inspection, 5K upfront improvements, 30 year term, 3K monthly rent, 5% vacancy.   

Expenses year 1: 2.6K prop tax, 1.8K HOA fees, 5% capex, 5% repairs, 500 lawyer/acct fees, 3K broker fee.

I increased rental income and property tax by 1.5% per year over the life of the loan.  I also budgeted in a month of broker fees every 5 years assuming intermittent tenant turnover.

Total cash flow at year 30 is 199K, plus the property value of 570K assuming a conservative increase of 10%.  That's 769K on an initial cash outlay of 94K.  

Thanks @John Leavelle @Doug Woodville this was helpful.  

I'm using 5% for cap ex, 5% for misc repairs, and $500 for lawyer/accounting fees.  Having a hard time gauging if this is realistic (or too conservative).  

I understand what you both are saying regarding the cashflow, however, it's only the first year that the cashflow is negative and that's because of the broker fee I am factoring in.  Over the life of the loan, the cashflow totals +200K, plus I'd be left with a paid off property at the end.  Isn't this "big picture" view more important than possibly having negative cashflow a year or two intermittently?

Hello,

I have been working on building a master Excel spreadsheet for analyzing deals.  I looked at a bunch of places with a realtor last night and there was one I liked in particular so I'm using it as a basis for analyzing my first deal and fine tuning my spreadsheet.  Would someone be able to help answer a few questions?

1.  Where in the analysis would you list the cost of having the property inspected upon purchase?  I believe this would be separate from the 2% I've estimated closing costs to be, but not sure if I should include it with the initial cost assumptions.  In the analysis example from Bigger Pockets that I'm using as a blueprint, it makes no mention of inspection cost.

2.  What would you estimate accountant/lawyer fees to be annually?  I'm sure this varies by region, and I am in Boston, so I would imagine the cost would be higher than the national average.  But I was wondering if there was a standard I could build into my model.

3. Is there a guideline for how much HOA or condo fees tend to increase annually over time?

4. Is it normal to see cashflow start out negative and then go positive over time, as NOI increases while debt service is static?

Thanks!

Hi Pamela, 

I've actually had some construction delays and haven't contacted Paul yet.  I'm hoping to in the next couple weeks though and will let you know how it goes.

Thanks Steven!  Much appreciated.

Hello - I'm new to real estate investing and have one property that I am prepping to rent, single family 3bd/2ba in Tonawanda.  I'm looking for a real estate attorney to help me draw up a lease and answer some newbie type questions.  Would anyone be able to give me a referral?

thanks!

Hello - I'm new to real estate investing and have one property that I am prepping to rent, single family 3bd/2ba in Tonawanda.  I'm looking for a real estate attorney to help me draw up a lease and answer some newbie type questions.  Would anyone be able to give me a referral?

thanks!