REAL-ESTATE-INVESTING5 MIN READ
Sort expenses before you underwrite
Classify common real estate expense lines into non-overlapping underwriting buckets.
Sort each cost into the bucket that keeps NOI and cash flow clean. Operating expense Capex or reserve Financing Investor tax or other Ongoing property taxes paid to the county Landlord insurance premium Third-party property management fee Planned roof replacement in year two Reserve for future HVAC replacement Monthly principal and interest payment Loan points paid to secure the mortgage Owner's personal income tax on net rental income Depreciation deduction reviewed with CPA
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