Instructions for use of Real Estate Investment Analysis Software

Step 1: Set up your spreadsheet software to handle financial equations.

In your spreadsheet program(Excel, Works, etc.) pull down the Tools menu and select Add-Ins. Make sure that Analysis Toolpak and Analysis Toolpak - VBA are both checked. Click OK to dismiss the Add-ins dialog box. NOTE: If these are not selected, some locations in the software that should have values will display a #NAME? error.

Step 2: Open the program and enter information about the real estate investment you are analyzing.

Open the REInvest.xls spreadsheet in your spreadsheet program. You may want to save the file under a new name that indicates the particular property you wish to analyze.

Once you have the spreadsheet open, click on the Property tab at the bottom of the spreadsheet. Click in the blue cell located under the Rental Property Information heading next to the title Property Name. Enter a descriptive name for your property in this cell. Tab through the next cells and enter the Address, # of Units and Square Footage for the investment property. Hit Tab again to move to the Property Financials section.

NOTE: Blue cells can be edited by the user and come preloaded with sample data. Yellow cells are calculated by software and cannot be directly edited. You will only need to enter information about your investment in the Blue cells on this sheet.

Under Property Financials section, Tab to and enter the Current Market Value, Purchase Price, Down Payment, Closing Costs and Expected Appreciation (%) for your investment. NOTE: Cells that expect a percentage value are marked in the title with (%). Tab to the Rental Income section.

Under the Rental Income section, Tab to and enter the Gross Monthly Reciepts, Expected Vacancy Rate (%), Other Monthly Income and Annual Rent Increase (%) for the investment. Tab to the Annual Operating Expenses section.

Tab through the Annual Operating Expenses section and enter the actual or expected annual values for the listed categories. Tab to the Mortgage section.

Under the Mortgages Section, enter the Mortgage Principal, Amortization Term (Months) and Annual Interest Rate (%) for your investment. Notice that the Monthly Payment and Annual Payment amounts in the Yellow cells are calculated by the software based on the amounts that you enter in the Blue cells. Tab to the Tax Information section.

Under the Tax Information section, Tab to and enter the Federal Tax Rate (%), State Tax Rate (%) and Long-term Capital Gains Rate (%) for your investment analysis.

Congratulations! You have now entered all the data in just minutes, on to the analysis!

NOTE: The more accurate the values you enter into the Blue cells are, the more accurate the resulting analysis will be. Simple, huh?

Step 3: Review the print the analysis of the investment.

Click on the Quick Summary tab at the bottom of the spreadsheet. You will notice a summary report of the investment as it stands. You can see in a few seconds if there is any cashflow from the investment and if it makes sense in your investment plan.

Click on the Year1-5 and Year1-10 tabs to see the financial statements and graphs of the data.

Try changing some of the values on the Propery tab to run 'what-if' analyses on your investment. Ain't science somethin'?

All the sheets on the various tabs can be printed and used in your presentation to potential investment partners and lenders.

NOTE: This tools is for estimation purposes only. This is not a guarantee of any return on investment and the author makes no guarantee of its accuracy. Remember, with any investment there are irrational things that no financial model can account for. I suggest using conservative estimates and actual data when available.

Good luck!