November, 2010 RealData Dispatch

MIRR -- How Does it Work?

From our experience, it appears that Internal Rate of Return (IRR) is the metric of choice for many, if not most, real estate investors. However, you may be aware that there are a few issues with IRR that can cause you some vexation: If you expect a negative cash flow at some point in the future, then the IRR computation may simply fail to come up with a unique result; and with your positive cash flows, IRR may be a bit too optimistic about the rate at which you can reinvest them.

For these reasons, a variation on IRR, called Modified Internal Rate of Return (MIRR), can be very important when you analyze an investment property. When you see how it works, then you’ll also see that it gives you the opportunity to deal with IRR’s shortcomings.

Our support folks have had a number of calls from users of our Real Estate Investment Analysis software asking for guidance in using and understanding MIRR. So -- how does it work, and how do I choose the “safe” and “reinvestment” rates that it asks for?

read the rest of the article here-->>

New Version 2 of REIA Express

The "Express Edition" of REIA has been especially popular among investors, teachers and students because it is more compact than our Professional Edition; but some of these users have told us it would be even more valuable if it could calculate after-tax cash flows, sale proceeds and IRR, like its big brother, the Pro Edition. (More about academic licensing in the next section.)

And so... we have just released Version 2 of REIA, Express Edition.

What Does It Do?

REIA Express Edition is really three programs in one:

•    Detailed Long-Term Analysis -- A 10-year pro forma projection of income and expenses, rent roll, financing, cash flow before and after taxes, and resale. Examine key measures of return, such as IRR, PV and cash-on-cash.

•    Quick Long-Term Analysis -- A full "first pass" analysis of a property you can complete in just minutes on a single worksheet. Save time, and decide if the property merits a more in-depth analysis.

•    Short-Term Analysis -- A month-by-month approach to a property you plan to buy, renovate and resell within two years.

What's New

•    After-Tax Calculations

 Annual before- and after-tax cash flows and sale proceeds
 Annual before- and after-tax IRR and PV

•    Executive Summaries

We've redesigned the Executive Summaries in both the Short-Term and Detailed Long-Term mode, again to be more like those in the Pro Edition.

•    "Net Selling Price"

Yet again borrowing a feature from the Pro Edition that our users asked for, we've added the option to deduct or ignore costs of sale when figuring equity and the PV of NOI plus Reversion.

You can get detailed information about this software on our web site at

RealData Software in the Classroom

A number of colleges and universities have been using our Real Estate Investment Analysis software and other materials for instructional purposes in their classes on real estate finance and investment.

If you are a student or teacher in these fields, you should know that we offer academic versions of most of our products for classroom use. These academic versions are fully functional and can be used for a limited time (e.g., a semester). They are available to enrolled real estate and business students and to teachers for a very nominal per-copy fee.

In addition, many instructors also use texts by RealData founder Frank Gallinelli to provide sample problems and case studies. These texts dovetail especially well with the Express Edition of REIA.

If you would like to find out more about academic use of this or any RealData product, please reach us via our online contact form.

New Look and Feel to Our Blog

We hope you clicked the "read the rest..." link in the first story, above, which took you to our Real Estate Investment Blog. We have just updated the look to be easier on the eyes, and to offer navigation by subject categories as well as archive dates.  We hope you like the new design, and encourage you to comment on our posts.

Can We Kindle Some Interest?

Now that Amazon has released their newest Kindle reading device for just $139, it seems that the popularity of digital books is booming. We think no book should be left behind, so we want to announce that Frank Gallinelli's latest, Mastering Real Estate Investment, is now available for the Kindle. In the coming weeks he will be releasing some additional ebooks on real estate investment and development topics, so check or subscribe to our blog for announcements.

Construction Institute

Thanks to a small newspaper announcement, we discovered the Construction Institute, which is affiliated with the University of Hartford. Don't  let the name fool you: it's not just about Connecticut and it's not just for contractors. It's a non-profit, non-partisan association of diverse professionals, including architects, engineers, financial professionals, attorneys, municipal and government agencies, developers,  manufacturers, support and service businesses, and -- yes -- contractors.

What motivated us to pay them a visit at the kick-off of their Fairfield County expansion is their strong emphasis on education and training. They have a very full calendar of workshops, professional certification programs and continuing education.  There were over 160 industry professionals at this event (great for networking), and we were really impressed by the organization's professionalism. We put our proverbial money where our mouth is and signed up immediately as members.

If you do business in the Connecticut / New York area, be sure to check them out.

New Pricing on Two Software "Bundles"

Just a reminder that  we're offering bigger savings on two of our software bundles.

With Bundle 4 at $1,199 you now save $564 and get

Real Estate Investment Analysis (REIA) Professional Edition
Commercial/Industrial Development
On Schedule
Comparative Lease Analysis
Personal Financial Statement

With Bundle 5 at $1,299 you get just about everything but our office furniture, and you save $762 in the process. You receive all of the above, plus

Portfolio Analysis add-on for REIA Professional
Comparison Analysis add-on for REIA Professional
1031 Exchange Analysis 
Understanding Real Estate Investments e-course

To get these special prices now go to our "software bundles" page.

 Reminder: Free Shipping on RealData Software

We're continuing our offer of free USPS first-class shipping on any software order over $50. For details, check our blog.

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Real Estate Cash Flow Concepts Explained!

What Every Real Estate Investor Needs to Know About Cash Flow
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Mastering Real Estate Investment
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Making the Deal

Insider Secrets to Financing your Real Estate Investments
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Latest Product Updates

REIA Professional Edition, v15
- - build 1.07
On Schedule, v5
- - build 1.09
Commercial/Industrial Dev v6
- - build 1.05

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