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How to use the Investment Worksheet


 How to use the Investment Worksheet

Video Explanation: https://www.dropbox.com/s/n4sqq37rr7iom4n/How%20to%20Use%20the%20Investment%20Worksheet.mov?dl=0

This is a brief overview of the investment worksheet that I’ve come up with for myself and for agents. 

This worksheet helps you look at an investment property for your with your client and compare and contrast different investment properties.  Please note that these are always estimates and this is actually a fairly light investment analysis. 

Presenting to Clients

This that just looks at a one year snapshot of a property and what the returns could look like. You will notice when you print it, you can see it divides just above where it says the “four benefits”. This is so you can print it front and back. That way you have a one pager to hand to a potential client when they’re assessing the value of a piece of real estate for investment.

Handout Tab

The other thing you’ll notice about this is there’s one tab that says handout and one tab that says amortization schedule on the excel document. The handout is the end product. You will not touch anything on this specific “Handout” tab. This all automatically populates and generates. 

If you have this excel document, but you’ve tinkered with things and it somehow messed up, or don’t have this, just let me know and I’d be happy create a new one with your contact info. That way all of the formulas are correct.

Amortization Schedule Tab (00:01:19)

The part that you do edit is here under amortization schedule. You’ll notice there’s an annual amortization schedule, that isn’t super relevant to potential clients. It helps create some of the calculations on the “Handout Tab”. You will also have all of your property information here. 

Property Information

Here is where you will enter the property address price, percent down, loan rate, loan years, & closing costs (gray boxes). The down payment, loan amount, P & I are white boxes. Don’t touch any of the white boxes. You will only change the information in the boxes that are Gray.

The chunk of data under property information, just the gray boxes, will be copied to its proper place in the “Handout Tab”.

For example: When I change the address to be 123 Example St, it will populate at the top of the form on the “Handout Tab”. When I enter the Purchase Price (on the Amortization Schedule Tab), for example if I say the purchase price is $200,000, it will populate on the “Handout Tab”. Everything automatically updates over on the “Handout Tab” as you make changes on the “Amortization Schedule Tab”.

Example inputs for a Potential Client (00:02:41)

Here is our example inputs: Address-123 example St., Purchase Price $200,000. We’re assuming that the investor is putting 20% down, which is pretty normative. If they have other assets that they could borrow against, a relationship with the bank or the bank has some confidence with them, they may be able to put as little as 10 or 11% down. Generally, 20% to 25% is what is required, minimum, for a property somebody is not going to occupy. 

Loan Rate 00:03:02

The next thing to notice is the loan rate. Interest rate is usually a little bit higher. Now there are some secondary market programs for properties, but usually they’re on some sort of adjustable rate mortgage and on a shorter term (15 or 20 years rather than 30 years).  We’ll assume for the next year it’s going to be about 3 1/2% and the number of years on the loan is 20. 

Automatically calculates Loan Amount 00:03:34

Given all this data, you can see that it automatically calculates $160,000 as the loan amount. It also calculates that $40,000 is required for a down payment amount in order to add up to the $200,000 price with 20% down. 

Closing Costs and Yearly Taxes (00:03:54)

We’re going to assume on a home like this that the closing costs are going to be $4000. 

For yearly taxes, often time, it is just north of, 1.3% of the purchase price in Manhattan. This is kind of my rule of thumb I use in my head. If we’re looking at $200,000 property, I’m guessing it’ll be 2300 for taxes, but I’ll probably go ahead and just put 2500 as my tax estimate. 

Insurance  & Management Fee Estimate (00:04:14)

Insurance on a property, like this, might be $1000.

There’s going to be a 10% management fee. This may or may not be applicable to your client. You may or may not put that in there. I would encourage you to compare apples to apples when it comes to different properties. So if you put the management fee in this excel document for one investment property and you’re comparing it to another investment property, I would put the same management fee in both estimates. If don’t put it in there for both that is fine as well. Just try not to let that section skews whether or not an investment property is a good investment. 

A normal management fee around 10%. This 10% can be negotiated for a better fee depending on how many units. In your normal one to four unit property, there’s going to be a 10% management fee.


Monthly Income (00:04:42) 

This is where we’re estimating how much revenue this property will bring in. So for a $200,000 property, perhaps we are hoping that it brings in $1800 per month. A lot of times investors will look at a 1% rule of thumb. They hope to get 1% of the purchase price. This is a short sighted way of looking at it. In this scenario you would hope to get $2000 a month for a $200,000 property. 

That’s not always attainable. So for this example we will just look at it as if it were making $1800 a month on a $200,000 property.

Vacancy/Delinquency (00:05:45)

Always anticipate some vacancy in delinquency. So for this example we will say 5%.

Seller Paid Utilities

Here’s where you disclose if there’s any seller paid utility. So let’s say in this example, the seller has agreed to pay for trash, and trash is $20 a month. We will say everything is else will be on the tenants.

Initial Remodel Costs (00:05:51)

This would be a category where if if you bought this investment property for $200,000, but it had some deferred maintenance we need to fix. For instance if they need to put on a new roof, new HVAC, paint, and replace flooring or what have you. This section will anticipate the initial remodel costs and take that into account in the analysis. 

Tax Bracket (00:06:08)

Usually I just put a placeholder in the Tax Bracket Section of 25%. We are assuming their income tax rate. If somebody makes a lot of money it will probably be higher than that if somebody doesn’t. If they make less it will probably be lower than that. But they also probably not going to be investing this type of cash into an asset, so 25% is usually a safe place holder there. This may be on the high side of what their actual effective tax rate would be.

Advertising Costs

I have this in here in case somebody were advertising themselves instead of management fee. 

Land Improvements (00:06:41) 

This could be fence, a garage, or something other than the house (something that is detached from the house).

Personal Property

Personal Property would be what is included in the property. Ex. Washer, dryer, kitchen appliances. For this example for Personal property we will put $5000 because this property has a washer, dryer and kitchen appliances.

Maintenance and Supplies (00:07:09)

We will anticipate $1000 in maintenance and supplies in this example during the first year. Again. This is a year snapshot. 

Hoas, Number of Units, Expecting 2% Appreciation

There’s no HOAs. The units doesn’t really matter. It’s just one in this scenario and then we’re expecting 2% appreciation over the course of the year. 


Once you have all these Gray boxes filled out that populates your handout to go over with your client. I will go over what the handout means in another video. But this is how you use the investment worksheet. 


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