Tool Calculates ROI for Thousands of Investment Properties in Seconds
Updated: Nov 2, 2020
My client, a broker, came to me with the problem that finding multi-unit income properties for her investor clients was a tedious, time consuming task. Every night, after a long day of showings, she sifted through the new MLS listings crunching numbers for several hours only to have a new crop of listings to analyze again the next day.
You can test drive an example of the tool here.
She felt overwhelmed in that no matter how well informed she was in her market the amount of searching and number crunching required to arrive at a quality list of potential investment property candidates was arduous to say the least. Given her best intentions and discipline, the busier she got this part of the job became more and more difficult to keep up with. Simply put if she wanted to give her clients the best service this was not a sustainable process.
Prior to contacting me, in an effort to alleviate this work, she and her business partner had developed a spreadsheet to which they imported the MLS data, "scrubbed" it and wrote the analysis formulas to do the calculations. While this was a step in the right it still had significant drawbacks in that importing the data was still a manual process that took time to complete due to inconsistencies in the quality of the MLS data provided. Also, the spreadsheet was only a snapshot in time. The moment a new property was added to the market or a price change occurred the spreadsheet was outdated. As we know the real estate market is fluid, and constantly changing.
So after identifying the pain points I proposed a system that would provide them with up to the minute data and calculate cash flow, total rents, down payments and very importantly ROI for all multi-unit properties in a tabular format that can be sorted and filtered as necessary to find the best properties fast. I also proposed that the system handle variables such as loan interest rates, down payment percentage, closings costs and management fees so the properties could be number crunched and analyzed with different combinations of these assumptions.
"The tool has taken the time of searching the MLS for properties, crunching the numbers and getting a short list to my clients from many hours to a handful of minutes. Before I dreaded this part of the job, but now I've incorporated a quick daily search through the tool and have the confidence I'm informing my clients with the best the market has to offer. Also, as a result of the work I did with Pablo, I can sustainably scale my investor client base."