You simply factor the economic environment into your business assumptions and try to keep emotion out of the decision.

The foundation repair company salespeople (and even owners, in some case) of structure companies are not engineers and though they may be right most of the time, there will be gaps in their assumptions.

There are a lot of moving pieces and you will be in for a rude shock if you use the BP calculators (not designed for $1-10M MF properties).IRR is a good metric but you need to have a solid grasp of the assumptions before you should use it.

I made this post hoping that I might be able to reduce my CapEx assumptions, but after a quick look at Sam's spreadsheet, I feel like I may need to use bigger numbers.

The best way to explaining this is for you to download an IRR calculator spreadsheet or build your own simple one and play around with one.For what its worth most deals I deem meeting minimal IRR standards is 13-15% but you have to dig a little deeper to uncover the real placements of cashflows and capitalization events... and then dig even deeper to verify the assumptions such as occupancy, rent increases per year, and what reversion cap rate was used.Again I don't look for IRR cause its manipulated a lot instead I look at total return on a 5 year basis.

For instance, if you had a vacancy in a three unit and had to do a unit turnover for a month, and then you took a month to lease it up (reasonable assumptions), your vacancy would only be 94.4% that year.

Is the software making an assumption about the dealer/investor status?

I haven't heard of any markets where units are renting low, so that's not part of my assumption.

Buffet said famously that his operating assumption is that the USD will go to zero value over the next 100 years.We also like bigger houses now than we did in the 1950s.And then there is migration.

Borrowing your down payment using a HELOC may impact your DTI which could impact your preapproval despite the rental income assumptions from the subject property.Ryan has a house hacking calculator spreadsheet that is way better than BP calculators to use to help you run your numbers.Timeline may be off.