To preface I'm a small time investor (a few single families w/ conventional mortgages).
In an attempt to quickly analyze prospective deals in one place I put together this google spreadsheet (link) to spit out cash to close, holding costs, debt service, cash flow, cap rate, etc. I've tried to include all the key basics however for those who are further along in investing, are there any changes you'd make? Any key things missing?
Attempt at a google sheets template for analyzing deals.
byu/downtownhobo inrealestateinvesting
Posted by downtownhobo
2 Comments
This looks pretty solid for getting a quick overview of potential deals. I noticed you have most of the standard metrics covered but might want to add a section for estimated rehab costs if you’re looking at properties that need work – that can really change your cash to close numbers fast.
Also maybe consider adding vacancy rate assumptions since that can impact your cash flow projections pretty significantly depending on the market you’re in.
Your template is actually pretty good! Here are some things you might want to consider adding.
Property management line, even if you self-manage. Model 8-10% so the deal still works when you scale or sell to someone who’ll hire it out.
Split CapEx and maintenance. Maintenance is the leaky faucet, CapEx is the $12K roof. Lumping them makes you under-reserve. I run 1% of property value for CapEx on top of maintenance.
Rent growth and expense inflation. You’ve got home appreciation but not these, which makes the 30-year cashflow number kind of fiction. 2-3% on both is a reasonable default – property taxes especially tend to outpace rent.
IRR. Lifetime cashflow on its own is weak because $14K in year 1 isn’t the same as $14K in year 25. IRR rolls cashflow, appreciation, and principal paydown into one annualized number you can actually compare deals on.
Stress test column. What does it look like at 15% vacancy, rents 10% below pro forma, or rates at 7.5% on refi? Saves you from buying a deal that only pencils in the base case.
Tax treatment on sale. Flat 15% misses depreciation recapture (25% on the depreciated basis) and the fact that ongoing cashflow is taxed at ordinary income, partially offset by depreciation.
BRRRR/refi scenario if you ever plan to pull cash out – tells a really different story than straight buy-and-hold.