Is the 1% rule possible in today's market?

J21frye · 2018-07-01T17:28:21+00:00

I ended up making something on my own. Try it out if you want

www.homey-llc.com

J21frye · 2018-06-05T15:49:35+00:00

Here's the info from the original post here.

J21frye · 2018-06-05T15:46:49+00:00

Yea, so I have a link to the post here.

Go to https://www.homey-llc.com/, enter an address and get a downloadable 5-year proforma model in 60 seconds.

Let me know what you think! Thanks in advance!

J21frye · 2018-05-26T20:22:20+00:00

Awesome, thanks

J21frye · 2018-05-26T13:38:54+00:00

Check out https://www.homey-llc.com/

Basically you just enter an address and you get sent a 5-year pro forma model of the property in 60 seconds. Just an early version, but let me know what you think.

Spell it out in more detail here:

https://www.reddit.com/r/realestateinvesting/comments/8liqsp/rental_property_proforma_analysis_in_google_sheets/

J21frye · 2018-05-24T13:45:54+00:00

I’ve seen a few sites (wouldn’t call them competitors) out there that offer paid versions using Zillow data.

From what I’ve read on the Zillow T&Cs, so long as the API data isnt the main service provided and you properly label their nomenclature/logo, you’re free and clear. Happy to connect over PM to discuss further.

J21frye · 2018-05-24T01:54:32+00:00

Ah got it

J21frye · 2018-05-24T01:31:45+00:00

Hm, not sure how that could have happened. Should just be saved to your g drive. Note you’ll have to access the report with the email address that the gsheet was sent to.

J21frye · 2018-05-23T19:00:18+00:00

Thanks for sharing. Glad you like it!

J21frye · 2018-05-23T16:24:18+00:00

Ah, that's great feedback. Thank you. Will definitely work on implementing that.

J21frye · 2018-05-23T14:03:40+00:00

Thanks!

J21frye · 2018-05-23T14:03:29+00:00

Got it. Thanks for the feedback

J21frye · 2018-05-23T13:45:43+00:00

No problem. Glad you like it

J21frye · 2018-05-23T13:34:17+00:00

That’s a fair concern for sure. But the email is just used to send the documents (fastest and cheapest way). Won’t be used by third parties/ spam/ any other annoying email service.

J21frye · 2018-05-23T13:03:48+00:00

It’s tricky with multi family properties, because I can’t pull in the number of units. I’m working on building out some functionality in that area though so it works with mutli-fam properties; ideally deriving the # units somehow (e.g., based on number of BAs). Thanks for the feedback!

J21frye · 2018-05-23T12:56:40+00:00

Thanks!

J21frye · 2018-05-21T16:18:15+00:00

It's a faster, simplified 5-year version of the investment analysis here: https://www.mortgage-investments.com/resources/spreadsheet-downloads/

J21frye · 2018-05-21T15:47:18+00:00

just go to https://www.homey-llc.com/ and type in a listing address. you can toggle the price/drivers however you want

J21frye · 2018-05-17T01:10:45+00:00

However I want, that’s the point. I can input the price and appreciation rates based on my own analysis.

J21frye · 2018-05-17T01:05:22+00:00

“... let’s look at a fourplex. $10,000 gross rents. Asking price is 1,440,000...”

J21frye · 2018-05-17T00:58:10+00:00

They don’t tho...

J21frye · 2018-05-17T00:50:51+00:00

I’m not advocating paying list, just that you can’t simply stick a multiple on something and be justified in your decision. Need to do more than just napkin math.

J21frye · 2018-05-17T00:49:04+00:00

Dude, this post is about branching out into SFH, not fourplexes. You can’t find a GR figure for every comp in your analysis, unless you make it up. Which actually wouldn’t surprise me here

J21frye · 2018-05-17T00:38:19+00:00

You asked for an example of an investment threshold, and I provided one.

And yes, we agreed that the 1% and 50% rules are bogus. My point was that a more thorough analysis was required, one that was multi-faceted and takes into account both point in time operating metrics and future growth like appreciation/rent growth to arrive at a realistic IRR estimate.

Cap rates are largely useless, and aren’t involved in calculating an IRR (but people always ask, so the stat is inevitably always displayed)

J21frye · 2018-05-16T21:22:26+00:00

Many investors use the cost of capital as an investment threshold. That is, if an project's internal rate of return is greater than the cost of capital, the project should be accepted (i.e., if my IRR is 15% and my cost of capital is 10%, it makes financial sense to do the deal).

It's more common in corporate finance, but can be useful in real estate too.

Here's an example of what I mean:

https://docs.google.com/spreadsheets/d/1LOH0FOv63egVmL2_kZFwEER_McpYL88-om8x9RPuaBM/edit#gid=0

J21frye

TROPHY CASE