real-estate-analyzer

name: real-estate-analyzer description: Property valuation, market analysis, investment ROI calculations, comparable analysis, and rental yield assessment. Use when evaluating real estate investments, analyzing property markets, or calculating returns.

Real Estate Analyzer

Comprehensive frameworks for property valuation, investment analysis, and market assessment.

Property Valuation Methods

Comparable Sales Approach (CMA)

The most common method for residential properties. Relies on recent sales of similar properties.

COMPARABLE SELECTION CRITERIA:
1. Location: Same neighborhood or within 1 mile
2. Recency: Sold within last 6 months (3 months preferred)
3. Size: Within 10-20% of subject GLA (gross living area)
4. Condition: Similar age, updates, and maintenance
5. Style: Same property type (SFH, condo, townhome)
6. Lot: Similar lot size and features

ADJUSTMENT CATEGORIES:
+ / - Location premium/discount
+ / - Size differential ($X per sq ft)
+ / - Bedroom/bathroom count
+ / - Garage, pool, upgrades
+ / - Lot size difference
+ / - Condition adjustment
= Adjusted Comparable Value

Comparable Property Analysis Template

Income Approach (Cap Rate)

Primary method for commercial and multi-family investment properties.

NET OPERATING INCOME (NOI):
Gross Potential Rent (GPR)
+ Other Income (laundry, parking, storage)
= Gross Potential Income (GPI)
- Vacancy & Credit Loss (typically 5-10%)
= Effective Gross Income (EGI)
- Operating Expenses
  - Property taxes
  - Insurance
  - Management fees (8-12%)
  - Maintenance & repairs
  - Utilities (owner-paid)
  - Landscaping
  - Reserves for replacement (3-5%)
= NET OPERATING INCOME (NOI)

PROPERTY VALUE = NOI / Cap Rate

Cap Rate Calculator

Cost Approach

Used for unique properties, new construction, or insurance purposes.

COST APPROACH:
Land Value (from comparable land sales)
+ Replacement Cost New (current construction cost)
- Depreciation
  - Physical (age, wear)
  - Functional (outdated features)
  - External/Economic (market decline, location)
= ESTIMATED PROPERTY VALUE

Investment Return Calculations

Cash-on-Cash Return

ANNUAL CASH-ON-CASH RETURN:
Annual Pre-Tax Cash Flow / Total Cash Invested x 100

TOTAL CASH INVESTED:
Down Payment
+ Closing Costs
+ Rehab/Renovation Costs
+ Initial Reserves
= Total Cash Invested

ANNUAL PRE-TAX CASH FLOW:
NOI
- Annual Debt Service (mortgage payments)
= Pre-Tax Cash Flow

Target: 8-12% for buy-and-hold residential

Rental Yield Analysis

Full Investment Return Template

PURCHASE ANALYSIS:
Purchase Price:              $__________
Down Payment (___%):         $__________
Loan Amount:                 $__________
Closing Costs:               $__________
Renovation Budget:           $__________
Total Cash Required:         $__________

MONTHLY INCOME:
Gross Monthly Rent:          $__________
Other Income:                $__________
Vacancy (___% of GMR):     ($__________)
Effective Monthly Income:    $__________

MONTHLY EXPENSES:
Mortgage (P&I):              $__________
Property Tax:                $__________
Insurance:                   $__________
HOA/Condo Fees:              $__________
Property Management:         $__________
Maintenance Reserve:         $__________
Utilities (owner-paid):      $__________
Total Monthly Expenses:      $__________

MONTHLY CASH FLOW:           $__________
ANNUAL CASH FLOW:            $__________
CASH-ON-CASH RETURN:         ____%

5-YEAR PROJECTION:
Year 1 Cash Flow:            $__________
Cumulative CF (5 yr):        $__________
Equity Built (5 yr):         $__________
Appreciation (___/yr):       $__________
Total Return (5 yr):         $__________
Annualized ROI:              ____%

Mortgage Payment Framework

MONTHLY PAYMENT (P&I):
M = P [ r(1+r)^n ] / [ (1+r)^n - 1 ]

Where:
  M = Monthly payment
  P = Loan principal
  r = Monthly interest rate (annual / 12)
  n = Total number of payments (years x 12)

AMORTIZATION SNAPSHOT (Year 1 vs Year 15 vs Year 30):
| Period  | Payment | Principal | Interest | Balance   |
| ------- | ------- | --------- | -------- | --------- |
| Month 1 |         |           |          |           |
| Year 5  |         |           |          |           |
| Year 10 |         |           |          |           |
| Year 15 |         |           |          |           |
| Year 30 |         |           |          |           |

Market Analysis Framework

Market Fundamentals Assessment

Neighborhood Scoring Matrix

Investment Property Scorecard

PROPERTY SCORECARD:
Score each factor 1-5, multiply by weight.

| Factor               | Weight | Score | Weighted |
| -------------------- | ------ | ----- | -------- |
| Location Quality     | 20%    |       |          |
| Cash Flow Potential  | 20%    |       |          |
| Appreciation Outlook | 15%    |       |          |
| Condition / CapEx    | 15%    |       |          |
| Tenant Demand        | 10%    |       |          |
| Financing Terms      | 10%    |       |          |
| Management Burden    | 10%    |       |          |
| TOTAL                | 100%   |       | __ / 5.0 |

RATING:
4.0-5.0  Strong Buy
3.0-3.9  Buy / Hold
2.0-2.9  Hold / Caution
< 2.0    Pass

Due Diligence Checklist

Pre-Offer

• Run comparable sales analysis (3-6 recent comps)
• Verify rental income (request rent rolls, leases)
• Calculate NOI, cap rate, and cash-on-cash return
• Check zoning and permitted use
• Review neighborhood crime statistics
• Confirm flood zone and insurance requirements
• Estimate renovation/repair costs

Under Contract

• Order professional inspection (structural, roof, HVAC, plumbing, electrical)
• Order appraisal
• Review title report and survey
• Verify property taxes and assessment history
• Obtain insurance quotes
• Review HOA documents (if applicable)
• Confirm utility costs (12-month history)
• Environmental assessment (Phase I if commercial)
• Verify all permits for past renovations
• Review tenant leases and estoppel certificates

Pre-Closing

• Final walk-through inspection
• Confirm financing terms and closing costs
• Set up property management (if using)
• Transfer utilities and insurance
• Prepare lease agreements for vacant units

1031 Exchange Overview

1031 LIKE-KIND EXCHANGE:
Defer capital gains tax by reinvesting proceeds into "like-kind" property.

KEY RULES:
- 45-day identification period (ID up to 3 properties)
- 180-day closing deadline
- Must use Qualified Intermediary (QI)
- Equal or greater value and debt required
- Same taxpayer name on both transactions
- Cannot receive "boot" (cash or unlike property)

IDENTIFICATION RULES:
1. Three Property Rule: ID up to 3 properties of any value
2. 200% Rule: ID any number, but FMV cannot exceed 200% of relinquished
3. 95% Rule: ID any number if you acquire 95%+ of identified value

COMMON PITFALLS:
- Missing the 45-day or 180-day deadline
- Touching proceeds (must go through QI)
- Attempting related-party exchanges
- Not matching debt levels (creates taxable boot)
- Mixing personal use with investment use

Quick Reference: The 1% and 2% Rules

1% RULE (screening test):
Monthly Rent >= 1% of Purchase Price
$200,000 property should rent for >= $2,000/month

2% RULE (strong cash flow):
Monthly Rent >= 2% of Purchase Price
Rarely achievable in appreciating markets

50% RULE (expense estimate):
Operating expenses = ~50% of gross rent (excluding mortgage)
Quick NOI estimate = Gross Rent x 0.50

70% RULE (for flips):
Max Purchase = (ARV x 70%) - Repair Costs
ARV = After Repair Value

See Also

• Finance
• Risk Management
• Investment Memo Generator