If you’ve taken my video course, read any of my books, listened to some of the podcasts I’ve been on, then you’re very aware that I often rant about how important it is for you to account for just the real operating operating expenses when you evaluate the worth of a property — no more and no fewer.
There is one mistake I see really often, and I want to call it out here in this video blog.
If you’re not an all cash buyer, then when you purchase a piece of income-producing real estate you’ll probably need to secure mortgage financing to complete the deal. It’s essential for you to understand what your lender is looking at when underwriting that loan.
And — If you guessed that he or she is not admiring your millinery — ok then, stick with me here. I’m going to discuss briefly a couple of key yardsticks.
Of course, this short video blog post is just the tip of the iceberg when it comes to evaluating, financing, and acquiring a successful real estate investment.
For in-depth insight into on all the key metrics and methods, check out https://realestateeducation.net/
And you’ll find the software that will do all the heavy lifting for your analysis and presentation at https://realdata.com
The information presented in this article represents the opinions of the author and does not necessarily reflect the opinions of RealData® Inc. The material contained in articles that appear on realdata.com is not intended to provide legal, tax or other professional advice or to substitute for proper professional advice and/or due diligence. We urge you to consult an attorney, CPA or other appropriate professional before taking any action in regard to matters discussed in any article or posting. The posting of any article and of any link back to the author and/or the author’s company does not constitute an endorsement or recommendation of the author’s products or services.
We’re very excited to announce the release of new Version 20 of our Real Estate Investment Analysis software. This application has been the go-to solution for thousands of income-property investors since its first release in 1982.
(No, that’s not a typo. We’re proud to report almost four decades of enhancements based on users’ feedback.)
Version 20 has big new features and a whole new outlook on both development and investment properties. It has you covered on all fronts — buy and hold, build and hold, fix and flip, value-add — now you can model them all with one software program.
At its core, Real Estate Investment Analysis (REIA) is income-property investment analysis software for all who deal with commercial or residential income properties: individual and institutional investors, developers, brokers, lenders, accountants, portfolio managers, financial planners, builders, and architects.
It helps you make detailed income and expense projections, before- and after-tax cash flow calculations, key ROI measurements, partnership analyses, and a great deal more.
New functionality in v20 brings you month-by-month development cash flow planning, with drawdown construction loan for value-add, renovation, even construction from the ground up. Evaluate the development phase, then see how holding the property produces returns over time.
Get the full scoop here about new version 20.
Copyright 2020, RealData® Inc. All Rights Reserved
The information presented in this article represents the opinions of the author and does not necessarily reflect the opinions of RealData® Inc. The material contained in articles that appear on realdata.com is not intended to provide legal, tax or other professional advice or to substitute for proper professional advice and/or due diligence. We urge you to consult an attorney, CPA or other appropriate professional before taking any action in regard to matters discussed in any article or posting. The posting of any article and of any link back to the author and/or the author’s company does not constitute an endorsement or recommendation of the author’s products or services.
The Commercial Income worksheet in RealData’s REIA Pro software is one of its leading power features that makes it a stand-out tool for investment analysis.
It’s designed to allow you to enter income from any number of tenants with great flexibility, and to model a lease scenario of any size or shape.
In this video we’ll have a quick overview of how this feature works, and how it can help you when you’re evaluating a commercial income property.
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Copyright 2020, Frank Gallinelli and RealData® Inc. All Rights Reserved
The information presented in this article represents the opinions of the author and does not necessarily reflect the opinions of RealData® Inc. The material contained in articles that appear on realdata.com is not intended to provide legal, tax or other professional advice or to substitute for proper professional advice and/or due diligence. We urge you to consult an attorney, CPA or other appropriate professional before taking any action in regard to matters discussed in any article or posting. The posting of any article and of any link back to the author and/or the author’s company does not constitute an endorsement or recommendation of the author’s products or services.
Have you ever had to scramble around a large DIY Excel model to find some key piece of information? Or churned out a ream of paper trying to format a report that a human could actually read?
We’ve all been there. And that’s why we built a unique menu that automatically adds itself to Excel when you run a RealData program.
In this video, we’ll show you how you can use that menu to streamline and simplify your real estate analysis work when you’re using RealData software.
In this video, we’ll show you how to use the custom menu that we add to your Excel toolbar whenever you’re using RealData software. It can really make your job a lot easier, especially when you’re working with a powerful program like our Real Estate Investment Analysis, Pro. Edition.
This is the third in our series demonstrating key features of RealData’s software for real estate investors and developers. More to come.
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Copyright 2020, Frank Gallinelli and RealData® Inc. All Rights Reserved
The information presented in this article represents the opinions of the author and does not necessarily reflect the opinions of RealData® Inc. The material contained in articles that appear on realdata.com is not intended to provide legal, tax or other professional advice or to substitute for proper professional advice and/or due diligence. We urge you to consult an attorney, CPA or other appropriate professional before taking any action in regard to matters discussed in any article or posting. The posting of any article and of any link back to the author and/or the author’s company does not constitute an endorsement or recommendation of the author’s products or services.
In our last post, we introduced our new series of short video that are designed to highlight some of the key features of our applications and help you get the most out of your RealData software. In that video we showed you the how REIA Pro could be used in any of three different modes — a detailed, long-term analysis; a quick analysis; and a short-term view, ideally suited to fix-and flip.
RealData software for real estate investors use Excel as their engine, so they offer you a familiar landscape on which to work. But you can easily go further by expanding on our products to customize them for your specific needs. In this second video, we show you some of the ways you can leverage the power of Excel to extend the functionality of RealData software.
To watch now, just click here.
And stay tuned for our next video, about using the custom menu that all RealData products add to Excel to make your work easier.
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Copyright 2020, Frank Gallinelli and RealData® Inc. All Rights Reserved
The information presented in this article represents the opinions of the author and does not necessarily reflect the opinions of RealData® Inc. The material contained in articles that appear on realdata.com is not intended to provide legal, tax or other professional advice or to substitute for proper professional advice and/or due diligence. We urge you to consult an attorney, CPA or other appropriate professional before taking any action in regard to matters discussed in any article or posting. The posting of any article and of any link back to the author and/or the author’s company does not constitute an endorsement or recommendation of the author’s products or services.
We’re always happy to help when users — and potential users — call to ask about a particular capability of our software. And that makes us stop to realize that applications like Real Estate Investment Analysis, Pro Edition have so many powerful features, sometimes real gems can be hidden in plain site. We’re pleased to say that we’ll be be delivering a series of short videos to highlight some of those features. You can watch the first of these right here:
Yeah, we could have come up with a sexier name than “modes,” but we’re real estate guys, not fashion designers. What really matters is that this video shows you how REIA is really three programs in one. Did you know you could even use it to evaluate a fix and flip project?
We have several more videos like this in the pipeline on topics that we get questions about, but we would very much like to hear what you want. Maybe something to do with entering data about commercial leases, or perhaps a feature that’s specific to multifamily? Maybe more detail on using the month-by-month analysis?
Please tell us. We want to know.
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Copyright 2020, Frank Gallinelli and RealData® Inc. All Rights Reserved
The information presented in this article represents the opinions of the author and does not necessarily reflect the opinions of RealData® Inc. The material contained in articles that appear on realdata.com is not intended to provide legal, tax or other professional advice or to substitute for proper professional advice and/or due diligence. We urge you to consult an attorney, CPA or other appropriate professional before taking any action in regard to matters discussed in any article or posting. The posting of any article and of any link back to the author and/or the author’s company does not constitute an endorsement or recommendation of the author’s products or services.
We have been enthusiastic users of Macintosh computers since the early days of RealData. In fact ours were among the first business applications available on the Mac in 1984. There are plenty of die-hard Mac users in our customer ranks, but even they will be frustrated with an apparent Excel 2016 bug which now affects our products.
At this time, all RealData software for Mac will run on both Excel 2011 and Excel 2016 (aka Office 365). However, if you have the latest Excel 2016 for Mac, then you will not be able to print any images, including graphs, to PDF reports. Thankfully this does not affect hard printing of reports. We have not been able to come up with a workaround, so wait we must until Microsoft patches this issue. UPDATE! This issue has been fixed in the May 23, 2018 release of Office 2016. Be sure to update to the latest release.
An important tip for all Mac users – be sure to update Excel to the latest release and also be sure to use the latest build release of your RealData products. For most of our products, only the latest release of the latest version of each will run on Excel 2016.
For more info on updating Excel, see our knowledge base article: https://www.realdata.com/docs/excel-2011-how-to-check-version-and-how-to-update/
A number of customers have asked if we’re updating our Real Estate Investment Analysis software because of the passage of the new tax law, effective in 2018. There’s still ambiguity about some provisions of the Tax Cuts and Jobs Act (which some might prefer to call the Law of Unintended Consequences), but we probably can parse it enough to make a few adjustments to the program. It may surprise you to know that, so far, we see the need for only a few simple changes in the software. But, of course, as technical corrections or other updates to the law occur, there could be others.
The most important is that there are new tax brackets:
| Tax rate | Single |
| 10% | Up to $9,525 |
| 12% | $9,526 to $38,700 |
| 22% | $38,701 to $82,500 |
| 24% | $82,501 to $157,500 |
| 32% | $157,501 to $200,000 |
| 35% | $200,001 to $500,000 |
| 37% | $500,001 or more |
| Tax rate | Married filing jointly |
| 10% | Up to $19,050 |
| 12% | $19,051 to $77,400 |
| 22% | $77,401 to $165,000 |
| 24% | $165,001 to $315,000 |
| 32% | $315,001 to $400,000 |
| 35% | $400,001 to $600,000 |
| 37% | $600,001 or more |
On the assumptions page, you’ll see that we now use 24% as the default entry, but you can enter whatever is appropriate for you.
Other rates and thresholds – such as capital gain and Net Investment Income Tax – appear to be unchanged in the new law.
Under the depreciation choices, we’re removing what had been called “Optional 40-Year Straight Line for Residential or Non-Residential.” That also goes by the name, “Alternative Depreciation System,” and this year is changed to be 40 years for commercial, 30 for residential. We’ve encountered very few of our customers who use that, so we felt we could take this opportunity to simplify the data entry a bit. We’ve kept the choice of “Other Straight Line,” which allows you to accomplish the same result.
These changes are free of charge as part of a “new build” update. Download this latest build by logging into your customer account at https://realdata.com and going to the “Sign In” link at the top right of any page. If you are using the Windows version, you may also click the “check for updates” button on the Welcome sheet of your REIA program. We are happy to assist you via email, so look also to the upper right for a link to email us
Finally, a side note about an interesting tax item that is not in the program:
We have never dealt with income tax issues in our partnership analysis because partnerships typically pass income through to individuals, each of whom in turn pays tax personally on their portion of that income. However, a new provision in the 2018 law may potentially provide a 20% deduction of Qualified Business Income derived from such pass-through entities.
To figure who qualifies and how much might be deducted personally is not for the faint of heart, but if you expect to be the recipient of Qualified Business Income from a real estate partnership, this Cornell law school has a flow chart might be helpful.
Finally, a note on why we don’t try to go beyond a general estimate of tax consequences in our software. Particularly with the changes in the 2013 and 2018 bills, the tax system has taken an increasing holistic approach. Your other investments and income from other sources can impact how much your overall tax liability grows when you add a new investment to the mix. Pretty much everything is connected.
Analysis of a single property cannot realistically address an investor’s entire financial life. We try to gather from you a modest and reasonable amount of information, so we can give you back what we hope will be reasonable estimate of consequences.
As the year goes on, if there are any changes or technical corrections to the law that we feel should affect the program, we’ll let you know here on our blog.
— Frank Gallinelli
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Your time and your investment capital are too valuable to risk on a do-it-yourself investment spreadsheet. For more than 30 years, RealData has provided the best and most reliable real estate investment software to help you make intelligent investment decisions and to create presentations you can confidently show to lenders, clients, and equity partners. Find out more at www.realdata.com.
Copyright 2018, Frank Gallinelli and RealData® Inc. All Rights Reserved
The information presented in this article represents the opinions of the author and does not necessarily reflect the opinions of RealData® Inc. The material contained in articles that appear on realdata.com is not intended to provide legal, tax or other professional advice or to substitute for proper professional advice and/or due diligence. We urge you to consult an attorney, CPA or other appropriate professional before taking any action in regard to matters discussed in any article or posting. The posting of any article and of any link back to the author and/or the author’s company does not constitute an endorsement or recommendation of the author’s products or services.
Today we’ve released new build 1.18 of our Real Estate Investment Analysis Express edition.
This build contains a new feature in the Rent Roll: If you select a commercial property type on the General worksheet, it will hide appropriate columns on the Rent Roll, namely Number of Bedrooms and Number of Bathrooms. Placeholder names for unit types adjust according to property type that you select.
This feature is currently available in the Windows release only. We hope to roll out this improvement for Mac users in a few weeks.