You should also factor in that, in addition to the loan payment, you'll need to factor in periods of vacancy, repairs, big-ticket items like a new roof or HVAC ("capital expenditures"), and the costs of a property manager. 

The response that I got back from him was that he intended to reject the amendment since there are other interested parties on the property.From experience with buying investment properties when something substantial comes up for capital expenditure items like roofs being at the end of their useful life, is the request that I made a reasonable one?

Even though Cap Ex % of 15% seems high, the dollar amount of $90 is low considering the age, condition and likely upcoming capital expenditures.

Most significantly, the idea that a building grossing $80k a year is only reserving $200 a year for cap expenditures is absurd. $10,000 is a better guess. $160 for vacancy reserve is also ridiculous.

Here’s an example of a case study assuming a 35% tax rate: The company had repair and maintenance expenditures that were miscapitalized totaling $3,134,215.The company had $696,267 of tangible property regs for year 1.The company had $28,180 in dispositions.The total savings resulting from the Engineered Tax Deduction vs.

. $37,800 after 19% reserve for Vacancy/Credit loss and Capital Expenditure across the portfolio.Goals:We are looking to acquire a 50+ unit commercial-residential complex (<$4M) by the end of the year.

If your monthly PASSIVE cash flow is greater than your monthly expenditures, you are generally wealthy.

Similarly, debt payments and capital expenditures are not normally included in the expense section.- Looking at your worksheet, your NOI is really your net cash flow.

That little of a transfer won't usually handle Capital expenditures like a new roof, or a new septic field though.Hope it helps!

So my interpretation of what he says would be to find highly sought out areas (depending on your investment strategy), and analyze deals in such a way that if you were to find a less than desirable property (C or D) and are able to rehab it to that of a (B) then factor in desirability v/s market v/s expenditures to result in the highest ROI.