) $0.00 $0 General Vacancy Loss 10.0% $9,240 Expenses Monthly Annual Fixed Electricity $0.00 $0 Water $66.67 $800 Sewer $0.00 $0 Garbage $15.50 $186 HOA $0.00 $0 Insurance $415.00 $4,980 Taxes $448.83 $5,386 Other $20.78 $249 Variable Repairs and Maintenance 3.0% $2,772 Property Management Fees 20.0% $18,480 Other Capital Expenditures (Reserves % Gross Income) 3.0% $2,772 Market Assumptions Market Rent Growth (per annum) 2.0% Expense Inflation 2.0%

Definitely need to understand that 10% of gross rents go to capital expenditures, 10% goes to maintenance, 10% needs to be included for future PM fees, 8.3% needs to be included for vacancy, and then pull all your numbers on the electric, gas, and water that you would be required to cover.  

Also can depreciate 1/3 of capital expenditures for building components, like new roof.  

I tried doing the same type of analysis for multiple properties and keep getting negative cashflows.Address: 11903 Fork Creek Dr, Houston TX 77065Purchase price: $110,000 (asking $128,000)Loan type: 30yr @ 4% fixedCash needed = $22,000 (20% downpayment) + $5000 closing = $27,000Monthly rent = $1,350Property taxes: $209/monthInsurance: $396/monthOther expenses (water, sewage, etc): $100Vacancy/repairs/cap expenditures/prop mgmt: 5/5/5/10Result = $1,350 (rent) - $1,425 (total expenses) = -$75.02 cashflow (??)

Now you are going to want to calculate capital expenditures.

This is also known as a capital expenditure (although land is not expensed).

Replacing the carpet would be considered a capital expenditure that would be depreciated.

About furnaces and expenditures, I look at the prospect as an experiment by which I could build in an exit clause to the deal, but if it works, I will have small but welcome passive revenue and accumulate the differential towards a reserve repair fund.

purchase price 104000 down payment (5%) 5200 Loan Amount 98800 total cash out of pocket (closing&rehab) 17200   monthly rent 1100       prop tax 178.83 insurance 80 Mortgate Insurance 23.4 Mortgage $478.83 vacancy (8% of rent) 88 repairs (5% of rent) 55 capital expenditures (5% of rent) 55   Monthly Expenses $959.06   Cash Flow $140.94   Cap Rate 7.15% Cash-on-cash 9.83%

It looks like there won't be much need of repair -- I estimate $5000 at most.All the utilities are split out for the 3 units, except for water, which is $200/quarter.If I estimate 10% Vacancy, 10% repairs and maintenance, 5% capital expenditures, and 10% property management fees (I will mange it myself), I get NOI $11,362, cashflow -$212, CoC return of -3%I believe it's in a good location/neighborhood, one that I wouldn't mind living in, and it's close to Newark Airport.I would really appreciate your thoughts.