Download a Free Real Estate Investment Spreadsheet | The Kickass Entrepreneur (2024)

If you would prefer to skip directly to download the investment property calculator excel spreadsheet, you can by following the above link where you can download the Excel sheet for free, or, you can click the red toolbar below.

I’ve written extensively on not only why you should invest in commercial and multi-family real estate, but, how to create wealth by investing in real estate.

In the article: Here’s How To Buy An Apartment Building And Make A Whopping 110% In Three Years, I detailed my purchasing analysis in regard to investing in an investment real estate property.

The Real Estate Investment Spreadsheet – An Explanation

One of the main criteria, when you invest in real estate, is to analyze the building’s CAP rate, and in addition, to consider how profitable the building is (NOI), and whether it makes for a suitable investment.

There are many factors that go into determining the profitability of investment property such as location, condition, investment purpose, projected cash flows, profit opportunities, etc.

Generally speaking, determining the profitability of an investment property can be achieved in different ways. You can either take advantage of my spreadsheet, engage an experienced consultant knowledgeable in a particular geographical area or use available investment property analysis software tools.

“When estimating how profitable the building Net Operating Income is, there are two methods of calculation which are commonly used: Discounted Cash Flow Analysis (DCF) and Internal Rate of Return (IRR)”, explains Jasper Juhl, a real estate expert and CEO of Better Estimate.

To find out how profitable the building NOI will be with each method, we’ll need to have an understanding of each method and its calculations.

In the article I referenced above, the building I was considering buying had a fairly low CAP rate. Under most circ*mstances, an investor might find it difficult to invest in a building with a low CAP rate, however, in this circ*mstance, I demonstrated why the lower the CAP rate, the better the short-term building increase would be. In this particular case, my return was going to be 110% inside 3 years.

Before moving into the free real estate investment spreadsheet explanation, here’s a quick recap

** NOTE, if you want a more detailed explanation of CAP Rate and Pro Forma cap rate, you can get that from this article: What is CAP Rate and Pro Forma CAP Rate in Commercial Real Estate and How Can You Create Wealth With These Numbers?

CAP Rate Formula

CAP rate calculation = Building’s Profit (BI) / Building’s Purchase Price

For example, let’s say the building has a sale price of $100,000, and after all expenses including insurance, hydro, and utilities, the profit is $100,00. The CAP rate will be calculated as:

CAP rate = $10,000 / $100,000 = 10%

Now, there’s one more important real estate formula you need to understand, pro forma CAP rate.

If you’re going to buy that $100,000 building, and you know the building needs $20,000 in repair costs immediately after taking possession, then technically you should add that number into your calculations.

The pro forma CAP rate will consider this $20,000 in additional building repair costs as part of the CAP rate.

The pro forma CAP rate formula is similar to the CAP rate formula:

Pro Forma CAP Rate Formula:

Pro forma CAP rate formula: Building’s Profit after repairs (BI) / Building’s Purchase Price

In this case, the numbers will look as follows: $10,000 / $120,000 = 8.33%

A large component of the real estate investment spreadsheet is in helping you calculate the building’s CAP rate. There’s also a multi-family mortgage calculator in the spreadsheet.

Real Estate Investment Spreadsheet – The Details

The fields in the free real estate investment spreadsheet are as follows

** There’s a GREEN Tab called “Start Here”

** Only enter values into the green fields. Do not touch the yellow fields

  • In cell B3 enter the purchase price of the property
  • In cell B4 enter the building’s downpayment
  • In cell B7 enter the amortization period in years
  • In cell B8 enter the interest rate
  • In cell B9 enter the mortgage’s first payment date

Now we move into the monthly rents for the multi family units, so, enter those values into the real estate investment spreadsheet:

  • In cell B12 to B33, you can enter the monthly rents for each unit
  • In cell B37 and B38, enter the parking and laundry revenue

The free Excel sheet will automatically calculate the gross monthly income

Subtract Expenses

In the Excel sheet, you will notice cells C42 to C50 lists many of a building’s typical expenses, and that includes: taxes, insurance, electricity, hydro, gardener, water, management, maintenance, heat, and snow clearing.

Once done, the system will calculate the building’s profit, and, then automatically calculate the building’s CAP rate.

In the sheet that you download, you will notice in cell B56 the CAP rate is 6%.

The system will calculate the yearly profit, and in this case, it is $72,000, the monthly profit is $6,000, and the dollars in your pocket after paying the mortgage is $1,777, which you will see in cell C62. The yearly profit is $21,327 as per the example in the Excel sheet.

Real Estate Risk Arbitrage

In the example I provided above regarding the property where I proposed to make 110% inside 3-years, the property had an approximate 25% IRR (internal rate of return), was an example of something called real estate risk arbitrage.

If you know that you will be able to quickly upgrade and flip a property, and you have calculated the proposed imputed value to be significantly higher, and you can buy something for $X, and sell for $X plus $Y, then you have real estate risk arbitrage.

What is Real Estate Recapture

Real estate recapture is the building value that is recovered with every mortgage payment. Each mortgage payment attributes a certain amount toward the principal and the balance toward the interest.

Let’s say, for example, that you have a $100,000 mortgage, and your next mortgage payment is $700. Of that $700, $200 goes toward interest and $500 toward the principal repayment. Your recapture, in this case, is $500, and you now have a mortgage of $99,500.

You will notice that in cell C62 I called the field “total profit per month”. In actual fact, this doesn’t really profit, because some of what the Excel sheet considers “profit” is really a contribution toward the building’s principal repayment, and in turn, is attributed back as equity.

A great tool for real estate companies is a flipbook maker. For example, you can present the results of this Spreadsheet with an interactive flipbook to customers or people interested. By making it interactive and containing all details, you can get more investors’ proposals and more clients for your company.

Monthly Amortization

In the real estate investment spreadsheet, you will notice another tab called “monthly amortization”. This is a mortgage table.

Click here to download the free rental property investment analysis calculator excel spreadsheet.

PaydayPact is the right choice for you if you need money to invest in real estate.

Other Real Estate Articles I’ve written:

REITs vs Rentals: Should you buy your own investment real estate property or invest in a REIT?

How to Create Massive Wealth Investing in Multi-Family Apartments

What are Real Assets, and How to Diversify Your Wealth by Investing in Them?

How Do You Make Money Investing in Apartment Buildings?

How Can a 25-Year-Old Buy Their First Home in an Expensive Real Estate Market, and Still Create Wealth?

Download a Free Real Estate Investment Spreadsheet

Download a Free Real Estate Investment Spreadsheet | The Kickass Entrepreneur (5)

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I'm a seasoned real estate expert with extensive knowledge and experience in the field of commercial and multi-family real estate investments. Over the years, I've delved into various aspects of real estate, exploring not only the reasons for investing in this sector but also developing strategies to create substantial wealth through strategic property acquisitions.

Now, let's break down the key concepts mentioned in the article you provided:

  1. CAP Rate (Capitalization Rate):

    • CAP rate is a fundamental metric in real estate investment, calculated as the Building's Profit (BI) divided by the Building's Purchase Price.
    • Formula: CAP rate = Building’s Profit / Building’s Purchase Price.
    • Example: If a building has a sale price of $100,000 and a profit of $10,000, the CAP rate would be 10%.
  2. Pro Forma CAP Rate:

    • Takes into account additional costs, such as immediate repair expenses, in the CAP rate calculation.
    • Formula: Pro Forma CAP rate = Building’s Profit after repairs / Building’s Purchase Price.
    • Example: If the same building requires $20,000 in repairs, the Pro Forma CAP rate would be calculated considering this: $10,000 / $120,000 = 8.33%.
  3. Real Estate Investment Spreadsheet:

    • An essential tool for analyzing investment properties.
    • Includes fields for purchase price, down payment, amortization period, interest rate, and more.
    • Calculates gross monthly income, subtracts typical expenses (taxes, insurance, utilities, etc.), and determines the building's profit and CAP rate.
  4. Monthly Amortization:

    • Represents a mortgage table in the spreadsheet, showing the breakdown of monthly payments towards interest and principal repayment.
  5. Real Estate Risk Arbitrage:

    • Involves quickly upgrading and flipping a property for significant profits.
    • Example: Achieving a 110% return in 3 years with a 25% Internal Rate of Return (IRR) by strategically investing in properties.
  6. Real Estate Recapture:

    • Refers to the building value recovered with each mortgage payment.
    • Monthly mortgage payments contribute to both interest and principal repayment, increasing equity.
  7. Monthly Profit vs. Equity Contribution:

    • The Excel sheet considers some of the profit as a contribution toward the building's principal repayment, attributing it back as equity.
  8. Additional Insights:

    • Mention of a flipbook maker as a useful tool for real estate companies to present results interactively.
    • A brief reference to PaydayPact as an option for obtaining funds for real estate investments.

For anyone interested, the article also offers additional resources and links related to real estate investment and analysis, including a downloadable free real estate investment spreadsheet.

Download a Free Real Estate Investment Spreadsheet | The Kickass Entrepreneur (2024)
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