Re: Does positive cash flow make a good deal?? - Posted by Trevor (OR)
Posted by Trevor (OR) on September 17, 2004 at 14:40:19:
Expenses at 25% is very low. You might get a hold of the owners taxes to see what he put his expenses at on them. Usually the owner will show all the expenses he can think of on the taxes.
Remember that you need to look into the future for your expenses. Not all expenses occur every month. Maybe a few months down the road the property will need new appliances, carpet, repairs, etc. that you don’t forsee right now.
Expenses include insurance, taxes, utilities, repairs, cleaning, advertising, management, maintenance (lawn care, snow removal, etc.) replacements (appliances, doors, lights, etc.) supplies, and the list can go on.
My point here is that you need to think of everything that it will take to run the property and figure it in. I think you will find that your expenses will be higher than you anticipate.