Buy real estate template

07/15/2012 21:19

Designing a strong real estate spreadsheet requires some forethought about the uses, calculations, and net results you're looking for. This should be done before you ever get started. Here we demonstrate some key considerations by means of a case study.To demonstrate the proper approach to designing and building a real estate spreadsheet in Excel, let's use a residential multi-unit rehabilitation project example. More at Buy real estate template. To keep it simple, let's assume it has 4 apartment units, was built 60 years ago, has 3 existing tenants, and requires new interior and exterior paint, some plumbing and electrical work to update the property to modern safety standards, and a partial re-roofing to fix some water damage.Our first step is to capture non-quantitative data in the spreadsheet, so we reserve a worksheet for that. This is used for location and condition information such as address, zoning category, residential vs. commercial, neighborhood, occupancy in the building and surrounding area, school district, etc. This will all be useful for financing and insurance purposes, as well as keeping track of a number of properties if you have a large real estate portfolio or a property management company. You might want to put it into a standard database format in case you want to save and analyze the information later.We want to look at costs, so we reserve a tab in the real estate spreadsheet for that. Here, you have a decision. You can either make a large list of standard rehabilitation and operating costs or a smaller list of costs specific to this property. The first option allows you to use the Excel spreadsheet for other properties which are probably not the same. The second option keeps things small and tidy and might work if this is a once-off investment. Either way, you will want to include all of the costs in a timeline schedule by week or month. This would include the re-roofing, paint, plumbing, electrics, landscaping, electricity if you are responsible for it, insurance, etc. The financing costs are likely to be the most complex because you need to estimate not only the interest rates of the loan or loans you get, but the principle amortization, mortgage insurance, etc. This can be complex from a calculations standpoint. How granular you get with costs is up to you.Since this is a residential rental apartment building it makes sense to include rental income in your real estate spreadsheet. That's obvious. What isn't so obvious are things like interest on tenant deposits, subsidies, tax refunds, etc. When you're building the spreadsheet you need to estimate when those revenues will arrive, and that relates to the number of tenants, the rental rates you charge, how long the lease term is for each tenant, etc. You also need to assume some late payments, evictions, and vacant units. If you haven't invested in the area before this can be a challenge. You can gather data on that by speaking with local real estate agents, lenders, and tax agencies, or subscribe to an industry database that covers the local area.In most locations you also need to consider taxes. Are these charged up-front? As part of the mortgage loan payments? How frequent are they? When do they actually need to be paid? Are there any accounting costs? Can you use any tax credits or breaks? How do you calculate depreciation if that is a tax deduction? Taxes can be quite complex and you need them in your calculations or your investment value estimates will be incorrect.In conclusion, designing and building a real estate spreadsheet is no simple task. Hopefully this article has provided some useful guidance.  For details. visit this page.