Residential/CRE Investor, a newly-released app for the iPhone, iPad and iPod touch, is a sophisticated yet user-friendly financial model for evaluating single-family, multifamily and commercial real estate investments
George Mathew, the app’s creator, said he wanted to create a program that effectively compared financial returns from a number of different products.
“I needed a model that compares the potential returns of different investment properties with a logic that is consistent with how analysts evaluate other investment options, including equities and corporate bonds,” Mathew explained.
In addition to its aforementioned features, the app also structures mortgage financing and determines pricing based on valuation metrics. For all potential investments, the app utilizes a Financing Likelihood Indicator that allows users to adjust an offer price based on a target internal rate of return (IRR) or projected capitalization rate.
Rather than building customized spreadsheets or working with costly desktop software packages, users are able to input property data and understand potential returns on a mobile device with an intuitive user interface, and users can also generate cash flow projections with as few as two inputs or with hundreds, making this financial model as simple or complex as a user prefers. The cash flow projections can then help determine the viability of potential financing structures and investment returns.
The app allows for unlimited properties, tenant units, expense items and revenue items, and each revenue and expense item’s growth can be generalized or customized by year. Other features include:
- Common building expenses can be shared with specific tenants.
- Capital expenditures can be projected by year and by tenant.
- Projected sale value can be based on price appreciation, capitalization rate, or even a discount rate with perpetual growth formula.
- Income taxes, including the tax benefits associated with building depreciation, can also be projected.
- Users can also e-mail property investment reports directly from their own e-mail outbox.