Financial Analysis of Investment Properties

I’ve spent many months learning the intricacies of performing financial analysis of investment properties, and have practiced by running the numbers on hundreds of listed properties. For the benefit of my readers, I want to devote a whole section of this website to the topic of real estate financial analysis, where I can hopefully provide a full overview of the topic.

I hope you find this tutorial interesting and helpful, and if there are any other topics you’d like to see covered (or clarified), please let me know:

Analyzing Multi-Unit Properties (Apartments)

1. Introduction to Real Estate Financial Analysis
2. Gathering Your Information
3. Net Operating Income (NOI)
4. Common RE Performance Measurements
5. Financial Analysis Summary

Analyzing Single Family Houses

1. Cash Flow vs Appreciation
2. Cash Flow Analysis
3. Rule of Thumb: 50% Rule
4. Rule of Thumb: 2% Rule

More Financial Analysis

1. Why Cap Rate is Important
2. What is a Fair Price (for Apartments)
3. Hypothetical Rehab & Rent Example (for Single Family Houses)
4. Analysis of a “Rent & Rehab Single Family Houses” Business (Part I)
5. Analysis of a “Rent & Rehab Single Family Houses” Business (Part II)

If you’re interested in learning more about this topic, check out the books listed in the Resources section of this blog. There are a number of great books on the topic (including Steve Berges’ “The Complete Guide to Real Estate Finance for Investment Properties”).

I’ll also be adding additional topics in the coming months and will post all changes to the main blog…