The World's Greatest Real Estate Deal Analysis Spreadsheet™
Attend the release party for the newest version of The World's Greatest Real Estate Deal Analysis Spreadsheet™ (version 2022.02) on February 2, 2022 at 6 PM.
New year, new deal analysis spreadsheet.
The The World's Greatest Real Estate Deal Analysis Spreadsheet™ reimagined for 2022.
In a word: simplify
The new rental property analysis spreadsheet is simpler to use.
We've moved all the information we rarely look at when analyzing a deal from the main Inputs & Dashboard tab to the Overrides tab.
We took the 9 most important decision-making metrics, made them easy to ready charts that take up 80% of the main tab.
In a phrase: simplify then empower
First, we simplified the input for making a deciding if the property is a deal or not, easier.
But, we also empowered you to do what you've never been able to do before in a deal analysis spreadsheet... override EVERYTHING.
Everything on One Screen
Use "Full Screen Mode" in Excel with 100% zoom to see the entire Inputs & Dashboard on one, reasonably-sized screen (1920x1080).
Easily Print to One "Landscape" Page
Want to print your deal analysis to share it with others? Easily print the entire Inputs & Dashboard on one "landscape" page.
Legal-sized paper is better, but letter-sized paper works.
Everything you need, but nothing you don't.
- Manilla Boxes: Inputs
- Gray Background with Blue Text: Calculated
Advanced Input Overrides
Feel empowered: override just about ANY variable using the Overrides tab.
Sparklines help understand what is happening at a glance.
Drill down more if needed and see Return Quadrants™ and more calculated.
- The World's Greatest Real Estate Deal Analysis Spreadsheet™ = analyzing a deal/property.
- Real Estate Financial Planner™ = analyze/compare entire investment strategy/strategies, goals and risks.
Export to Real Estate Financial Planner™
One-click export will allow you to go straight from deal analysis to full portfolio and strategy analysis.
Easily Export Charts for Presentations
Sharing your deal with a partner, spouse, lender, or banker?
Easily export charts from The World's Greatest Real Estate Deal Analysis Spreadsheet™ to Microsoft Power Point or Microsoft Word.
Export as an image like this:
Or, export as a dynamic chart that updates when you make changes to the original spreadsheet like this:
9 Primary Charts
- Monthly Cash Flow – Year 1
- Return in Dollars – Year 1
- Return on Investment – Year 1
- Returns if Sold (ROI and IRR) – Years 1-20
- Cash on Cash ROI & Cap Rate – Years 1-5
- Return on True Net Equity™ – Years 1-20
- Key Metrics – Annual – Year 1
- Non-Loan Expenses – Year 1
- Equities and Cost-To-Access – Years 1-20
Monthly Cash Flow – Year 1
Shows the monthly value of:
- Cash Flow (after all expenses)
- Cash Flow from Depreciation™ - Just the cash flow from your depreciation benefit (after taxes).
- True Cash Flow™ - Which is the sum of cash flow and Cash Flow from Depreciation™.
This tends to be the primary metric folks look at when analyzing a rental property.
Return in Dollars – Year 1
This shows you the Return in Dollars Quadrant™ values (in chart form) for year 1.
That's the dollar amount of each of the following in the first year:
- Cash Flow
- Debt Paydown, and
- Cash Flow from Depreciation™
There is more to buying rental properties than cash flow. This chart shows you this succintly.
It answers the questions of:
- How much did the property appreciate in year 1?
- How much cash flow did you generate in year 1?
- How much did you pay down in debt in year 1?
- How much cash flow did your tax benefits of depreciation generate?
- What was the TOTAL benefit (in dollars) you gained by owning this property in year 1? The number at the top in bold.
Then, it does the same numbers but also includes the amount you earned from reserves.
We have 2 "flavors" of reserves depending on how people choose to handle their reserves: 6 months of reserves in an account that earns 1% per year (RIDQ+R6™) or 12 months of reserves in an account that earns 8% per year (RIDQ+R12™). For more information on this concept, check out Everything You Learned About Deal Analysis is Wrong – ROIQ+R™.
Return on Investment – Year 1
In the last chart, we showed the DOLLAR AMOUNT from appreciation, cash flow, debt paydown and Cash Flow from Depreciation™... but this chart we show you that dollar amount divided by the Total Invested.
In the case of Return on Investment Quadrant + 6 Months Reserves (ROIQ+R6™) and Return on Investment Quadrant + 12 Months Reserves (ROIQ+R12™) it is the dollar amount divided by the Total Invested PLUS... either 6 months of reserves or 12 months reserves.
Astute investors will recognize that the "cash flow" ROI here is the same calculation as Cash on Cash Return on Investment.
Returns if Sold (ROI and IRR) – Years 1-20
This chart shows you the returns you'd earn if you sold the property calculated 3 different ways.
First, the total returns you earned for the entire holding period (after all sales costs) divided by the Total Invested and the number of years you held the property. This is the Annualized Return on Investment (aka Annualized ROI).
Second, the same calculation except the compounding rate of return version. This is the Compound Return on Investment (aka Compound ROI).
And finally, the Internal Rate of Return (IRR) calculation that better accounts for WHEN you put money in and take money out of the property to calculate the return you're earning on the investment. One could argue that this is the best return to use.
Many investors who plan on selling their property after holding it for a period of time will find this chart invaluable.
Cash on Cash ROI & Cap Rate – Years 1-5
In the Return on Investment chart above, we showed Cash on Cash Return on Investment as one of the returns.
It is so important to some investors that we list it again here and compare it to Capitalization Rate (aka Cap Rate).
Most investors prefer to use Cash on Cash Return on Investment, but a good number of investors prefer to use Cap Rate in their decision-making process.
So, here's both.
Return on True Net Equity™ – Years 1-20
After year 1, taking the dollar amount of return earned in that year and dividing it by the initial Total Invested when you bought the property becomes a less important measure.
One could easily argue that taking the dollar amount that you earn in that year and dividing by the equity you have in the property that year is a better measure of the return you're earning on the amount you have in the deal.
Further, one could argue even better that it is not the return you're earning on gross equity, but rather, the return you're earning on the money you'd walk away with after sales costs (real estate commissions, closing costs, depreciation recapture tax and capital gains tax).
Really, what you want to know is the return you're earning on the money you'd get if you exited the deal. If you sold the property, this is the return you'd need to earn on another, different investment to do better than this property.
This chart shows you the return you're earning from the 4 component returns (appreciation, cash flow, debt paydown and Cash Flow from Depreciation™) divided by True Net Equity™ (equity after all those sales costs) for the first 20 years.
It also shows the total return for all 4 component returns divided by True Net Equity™.
Key Metrics – Annual – Year 1
Some real estate investors would like to know Gross Potential Income (GPI), Gross Operating Income (GOI), Operating Expenses (OpEx), and Net Operating Income (NOI) for year 1.
So, that's what this chart shows.
Non-Loan Expenses – Year 1
Often investors will want to get a feeling for the expenses on the property. This chart shows the non-loan expenses for the property in the first year.
It also includes the dollar amount for the vacancy allowance as well.
Equities and Cost-To-Access – Years 1-20
Some real estate investors will want to either sell the property or refinance the property to access the equity in the property at some point in the future.
This chart shows the amount of equity (after all sales costs... which we define as True Net Equity™) that they'd walk away with if they sold the property.
It also shows the amount of equity they could walk away with if they did a cash out refinance of the property.
Additionally, it shows the cost-to-access the equity in both cases as a percent of the money they'd walk away with.
You can still drill down into the Overrides tab.
Modeling Variable Returns
Appreciation isn't always 3% per year (or whatever number you're using). One year it may be 3%, then next 0%, the next 6.13% and so on.
With The World's Greatest Real Estate Deal Analysis Spreadsheet™ you can use formulas for OVERRIDES to model variable returns for things like:
- Appreciation Rate
- Rent Appreciation Rate
- Maintenance Rate
And, you can see how your investment might perform with variable returns.
For example, you could use
=NORMINV(RAND(),0.03,0.01) to override Appreciation Rate and Rent Appreciation Rate.
The overrides might look like this:
And, the new charts on the Inputs & Dashboard might look like this:
Professional Sponsorship Licensing
If you're a professional that works with real estate investors (real estate agents/brokers, lenders, Accountants/CPAs, and financial planners) and want to license The World's Greatest Real Estate Deal Analysis Spreadsheet™ to have your contact information on it so you can give it to your clients, we offer the ability to license it and have your contact info on it.
Available in Two Editions: Silver and Gold
The Silver Edition includes everything above with the two tabs: Inputs & Dashboard and Overrides.
The Gold Edition has yet to be released but will have extra tabs and have additional dashboards/insights specifically for:
- Partnerships - Extra dashboard and insight for modeling buying your property with more than one partner with, possibly, unequal investments, cash flow and equity allocations between the partners.
- Return Quadrants™ - A summary tab showing a variety of Return Quadrants™ for your property.
- Lease-Options - Extra dashboard and insight if you're considering selling the property to a tenant-buyer using a lease-option.
- Should I Sell My Property - Extra dashboard and insight if you're considering selling your property.
- Should I Refi My Property - Extra dashboard and insight if you're considering refinancing your property.
- Track Your Property’s Performance - Because we now allow you to OVERRIDE just about any variable for any year, you can use TWGREDAS™ to keep track of how your property has performed over time and calculate returns based on actual performance (not just pro-forma).
James plans work on the Gold Edition sporadically, irregularly over the next year or two. He accepts bribes (of significant size) to move the thing you need toward the top of the list.
Real Estate Bookkeeping Spreadsheet
The spreadsheet on this page is obviously for deal analysis, but we also offer a real estate bookkeeping spreadsheet you can use to keep track of all your rentals, including their income, expenses, and accounts. This bookkeeping spreadsheet includes super easy tools for inputting information to your taxes at year-end or for emailing to your accountant, bookkeeper, CPA, or other tax preparer.
Visit our real estate bookkeeping page to download this spreadsheet and read our tips how to get your real estate books organized and under control.
Need Deal Analysis Help?
We have over 20 hours of some of the best real estate deal analysis training available anywhere, taught by two experienced real estate investors: me and Brian.
The Real Estate Financial Planner™
More Powerful Than A Deal Analysis Spreadsheet
If you want to go beyond simple deal analysis and analyze your entire portfolio and investment strategy, including real estate as well as stocks, bonds, and other investments, then there is no option more powerful than the Real Estate Financial Planner™ software.