When discussing cash flow/month (not CoC) do you include maintenance repairs and vacancy in the calculation? If so, how much for each?
I don’t understand your question exactly, so I just offer my operating assumption that the expenses (including a vacancy factor of 5%) are 50% of the gross schedule income.
This is a rule-of-thumb that should be assumed when you don’t have all the operating numbers available. Even if you do have all of them, you need to have experience analyzing many similar properties in order to know what is ‘reasonable’ and what is out of line with the age/location of the subject project.
For example, taxes in NJ are horrendous at over 2.5% of the purchase price. This causes the expense on any multifamily to climb well over 50%. And it’s worse if utilities are paid by the owner. It’s not unusual for the gross expenses, in high-tax areas, to average more than 70% of the GSI.
Meantime, the expenses (in a more fairly taxed location) can still often climb well above 50% if the project is more than sixty years old; is in a crime-ridden area, and the utilities are paid by the landlord.
All things being equal, maintenance, not including replacements and reserves (3% of GSI) are assumed to average 10% of the market GSI (not necessarily the ‘actual’ GSI, since rents are not always ‘at market rate.’ And you know when they’re not, if/when there’s a waiting list.)
Combined On-site/Off-site Management should hover around 10% of the market GSI. Again, this figure can be higher/lower depending on the age of the building, its location, and the vacancy factor.
To summarize:
Maintenance 10% (not including replacement/reserves) of Market GSI
Management 10% of Market GSI
Probably more than you needed, but…