Expenses include utilities, maintenance (3-5% of rental income), and capital expenditures (3-5% of rental income), and vacancy.

➡️ Can you provide a list of completed capital expenditure (Capex) items and their costs?

Vacancy, property management, repairs, maintenance, and capital expenditures are all MANDATORY expenses.

Are your personal debt and expenditures under control?  

For simplicity sake, let's assume a 40% expense ratio, giving a net operating income (NOI) of $216K.If we were to buy at their asking price of $2.99 million, we'd be looking at a cash-on-cash return of 7.2%, and that's without factoring in capital expenditures or debt service.I'd say this one has a looong way to fall before it's a deal!

- Broad language excusing PM from any responsibility (including that of anyone they subcontract out to)- Charging the owner additional "convenience fees" if they "fail" to perform according to an agreement (with broad language about what that means)- Making the owner pay for any mediation / attorney fees for both parties (with no cap specified)Specific fee structure: - Management Fee: 10% scheduled rents (up to 3 units); 8% up to 15; 6% up to 35- New tenants placement (not renewals): 50% first month rent- 10% mark-up on all service fees (no receipts required)- 15% mark-up on total cost for any capital expenditures- Flat turnover fee- Flat evictions fee

In order to determine NOI, do I include only annual repair and maintenance expenses or also a budget for long-term capital expenditures (roof, heating, etc)?

And it would actually be much lower than that because I didn't calculate for maintenance, vacancy, bad renters, capital expenditures, your time, or anything else.You must plug in the real numbers to see if this will work.

I agree with Nicholas that the capex expenditures are low.

You need to budget and an additional $929 to set aside for future budgeting items (vacancy, maintenance, and capital expenditures).