Multi-Family Asset Analysis Tool
Good evening BP
I had (mistakenly) posted this in the Multi-Family forum, and have no moved it to the Marketplace.
For anyone who watched today's Webinar, the #1 Truth is that "It's all about what is in your Toolbox"
Along those lines, I have been putting together an Excel spreadsheet tool that can be used to determine several key facts about a multi-family property.
The first tool takes user inputs on a property, and then gives you outputs based as a "Pass" or "Fail" metric.
The purpose of this first tab is to give a very high overview of a property without taking too much time. All of the calculations are based off of standard ones that are promoted on BP, so I won't go into too much detail on what each "rule" is. Key things to note: The 2% Rule gives an "estimated worth" based on this rule, which can give you a rough idea of what the property can be valued at. The 50% rule "passes" if the cash flow per unit is above a desired amount that you specify in Section 1. The Cap Rate rule "passes" if the cap rate is above a value that you specify.
Since there are only 11 inputs on this tab, it can be very quick to sort through properties and determine if they merit a deeper look. If they pass the criteria that you set, then you can move on to the next tab and delve a little deeper.
Section 1 is most of your user inputs for the property details. This allows you to set vacancy rate, property management, maintenance, CapEx, utility bills, taxes, etc.
Section 2 is all of you calculations - mortgage payments, income, NOI, Cash Flow, etc. These calculations are used to show key numbers to to the user:
Section 4 gives more details on the property. The Cap Rate passes based on a user-defined cap rate that you want to reach. Cash Flow per Unit is also user-defined.
The "Value Based On Cap Rate" will give you the value of a property based on the cap rate percentage that you define.
The "Value Based on 2% rule) is exactly what it sounds like. In this case, the property would be estimated at a value between $325k and $500k. These two numbers are difference because they are derived from two separate ways of thinking.
Cost per Investor is how much cash would be needed at the time of sale. Since you can specify the number of investors, you can split this up between equal-share partners.
Section 5 allows you to set up two different "offers" that you might make when purchasing a property. This gives you the chance to put in two different deals, and determine what the bottom line difference is for you.
Section 6 gives you a chance to put in some data if you are using a private investor. "Finder's Fee" is set at 3% of the purchase price, and will be paid out at time of sale. "Investor Repayment %" is the percentage that you are offering the private lender. This is currently a straight percentage, and is not compounded. "Personal Funds" are your own skin in the game. "Investment money needed" is how much private lending you will need, based off of down payment, escrow, finder's fee, and closing costs - then subtract your own personal funds. "Total Investment Repayment" is the original investment plus the percentage that you offered them. "Repayment Time" is how long it would take you to repay the investors. "Seller Receives" is how much the seller will get at the end of the amortization.
At this point, I am looking for anyone who wants to test out the spreadsheet for me. The one condition that I have is that you provide some form of feedback, regardless of what that feedback is. My goal is to provide the BP community with a tool that will help them make educated decisions when purchasing a MF investment property.
BP does not allow sending files to non-colleagues. If you would like to test the file, please send me a colleague request or an e-mail address that I can send the file to.