But any one property in any given year could have a couple of one-time capital expenditures that will completely blow up your planned cash outlay for the year.So make sure you are giving yourself enough of a cash cushion just in case.

The only problem that I have with using my cash on cash return in year one is as follows: What if in Year 1 I have a large amount of Capital Expenditures that occur (small amount of rehab, paint, floors,fence) ?

Specifically for vacancy, repairs and capital expenditures?

In some ways not as critical from a business perspective, but you need to be able to keep your home livable and functional as well as your renters' units.If you estimate the remaining life of components, the cost of replacing them and then do the math amortizing the costs you can come up with a capex number and expenditure timeline.

In your scenarios, you have one set of properties that cash flow, but may require some capital expenditures down the road and you have another set of properties that may cash flow, but won't require too much maintenance; but they're in cyclical markets.  

For example, if you are buying the property outright, i.e. no mortgage, that $1000 -$1500 per month goes to your expenses, (utilities, capital expenditures, vacancy, etc.) and the remainder is your net cash flow.

The difficulty that I am having is when it comes to larger items, such as New HVAC and knowing how much to put away given its useful life when a property is acquired, Painting a property, new roofs (along with determining its useful life), redo of blacktop for parking lots (especially older properties).....these larger capital expenditure items are a lot more difficult to determine in my opinion aside from putting money away for unforeseen maintenance items or vacancy. 

I think it's important to have a business plan. i havent started my investing yet so take my opinion with a grain of salt but the more I think about it the more complicated it seems. really what im trying to do is just buy multi family properties at some kind of discount. add value by renovations or by purchasing in a down market. then fix it up to my companies standards and get them rented out one unit at a time. some of the things ive been thinking about include financing. how will i finance deals after the first 4 or so when the banks stop lending traditionally. also how much do I need in resurves to cover everything from fees to extra holding costs to a major cap expenditure. i want my business to have a plan so i will succeed no matter what. so i think its important to think about those types of concerns regardless of what type of investing you're doing and factor those in to your plan. im excited to save money for the first deal im only at 3k so far.

I decided that i needed to find a multi family property to house hack and also find ways cut down on some of my monthly expenses and expenditures.

I want to spend less than $3,000 on inspections and closing costs I want to spend less than $20,000 in initial repairs and rehab Schools above 6 rating Tenants pay all utilities Ideally: Rent 1% or more of ARV Ideally:10-12%+ CoC ROIIdeally: I want minimum 100+ monthly cash flow or 100/door after ALL expensesWhen possible, I want to purchase multifamily units (2-4, max 8)Values we use in our calculations: 5.5% interest rate, 30 years, 25% DP 10% vacancy 6% repairs and maintenance 6% capital expenditures 10% management fees 2% annual income growth 2% annual appreciation growth 2% annual expenses growth 6% sales/exit expenses