real estate investment analysis: Can Capex Reserves Affect Your Real Estate Investment’s Valuation? - 11/07/14 08:11 AM
Can something as simple as the treatment of reserves alter the valuation — or evaluation — of your income-property investment?
This is a discussion that comes up every year when I teach real estate investment analysis to my grad students: Where, how, why do you deal with "reserves for replacement?" What difference does it make where you put them in your financial work-up on an income property?
As they say in Congress, where you stand depends on where you sit; and your handling of reserves can be driven to a great extent by what your agenda is.
Get my take on … (0 comments)

real estate investment analysis: Some Really Short Surveys, and a Maybe a Nice Freebie for You - 03/17/14 07:31 AM
We’re always looking to have our RealData analysis software keep up with the changing needs of investors, and so we are embarking on a series of really short surveys to help us measure those needs.
Our first survey asks just two questions: What kind of property do you buy (or want to buy) and what is your reason for making cash flow projections? Just check off all the answers that fit.
About that freebie. You can optionally attach your email address to the survey and we’ll enter you in a random drawing for one of three signed copies of What Every … (0 comments)

real estate investment analysis: Podcast: Key principles to analyzing your real estate deals - 02/25/14 06:42 AM
I had the pleasure of recording a podcast recently with real estate entrepreneur Kevin Bupp. We discussed what I feel are some of the key principles that every real estate investor ought to understand — and so, I invite you to listen to that podcast here.
Frank Gallinelli

real estate investment analysis: Part 4 of "The Alphabet Soup of Real Estate Investing" -- (CpA) - 02/16/14 01:28 PM
Here's the final leg of our race: Part 4 of our series on "The Alphabet Soup of Real Estate Investing” discusses Capital Accumulation Comparison (CpA) as a possible to way to choose between two mutually exclusive real estate investment opportunities.
In particular, it can help you put properties on a level playing field when they require different amounts of initial cash to invest, and even when your expected holding periods may differ.
I hope you've found this series worthwhile, and invite your comments and questions.
Frank Gallinelli

real estate investment analysis: Part 3 of "The Alphabet Soup of Real Estate Investing:” FMRR & MIRR - 02/10/14 08:53 AM
In Part 2 of this series of articles we had just reached what appeared to be an epiphany of sorts. We turned Discounted Cash Flow on its head, solving for the rate rather than the Present Value. That rate – the Internal Rate of Return – looked like it provided a good measure of investment return and an excellent way to compare alternative investments because it was sensitive to the interplay between the timing and the magnitude of our investment’s cash flows.
That’s when I issued a “Not so fast” admonition, with the unabashed purpose of luring you back for the next … (0 comments)

real estate investment analysis: IRR: Part 2 of our 'Alphabet Soup of Real Estate Investing' Series - 02/03/14 09:12 AM
​In the first installment of the four-part series on our ​RealData blog I introduced two important measures of investment performance, Net Present Value (NPV) and Profitability Index (PI).
Now I want to continue this review of key real estate investment metrics by looking at Internal Rate of Return (IRR). IRR is the measurement of choice for many real estate investors because it takes into account both the magnitude and the timing of a property's cash flows.
Here is our second installment, NPV, PI, IRR, FMRR, MIRR, CpA — Stirring the Alphabet Soup of Real Estate Investing, Part 2.
---Frank Gallinelli

real estate investment analysis: The Alphabet Soup of Real Estate Investing - 01/28/14 08:01 AM
Successful investing in real estate depends to a great degree on your ability to work with some basic financial concepts.  How do you take the measure of an income-producing property? What does the terminology mean?
Allow me to continue my review of key real estate investment metrics by revisiting a four-part series where I discuss Net Present Value, Profitability Index, Internal Rate of Return, and more. I believe that these concepts aren’t difficult to master if explained in plain language, which is what I try to do here.
Here is Part 1 of NPV, PI, IRR, FMRR, MIRR, CpA – Stirring … (2 comments)

real estate investment analysis: for real estate investors: Using Cap Rate to Estimate Value - 01/20/14 09:28 AM
Real Estate Investment Metrics: I invite you to join me again in my discussion of key metrics for investors in  income-producing real estate.

"Using Cap Rate to Estimate the Value of an Investment Property"

real estate investment analysis: for real estate investors: Understanding Net Operating Income - 01/15/14 11:50 AM
My recent articles have prompted some readers to ask for a review of the key real estate investment metrics. Let's start here:
Understanding Net Operating Income

real estate investment analysis: The 50% Rule vs. Discounted Cash Flow Analysis - 01/07/14 08:35 AM
I like to read the discussions in a number of online real estate investment forums to see what issues are of interest to investors at all levels of experience. One topic that seems to excite a lot of commentary concerns the relative merits, or lack thereof, of projecting and analyzing the potential future cash flows from an investment property—call it Discounted Cash Flow (DCF) or pro forma analysis. Since I’ve spent a good part of my professional life teaching on this subject and providing software tools to accomplish such analyses, discussions like these jump out at me; and my last post … (2 comments)

real estate investment analysis: for real estate investors: Part 2 of "The Cash-on-Cash Conundrum" - 09/30/13 01:34 PM
​In a prior post I mentioned several new articles that I've written recently for income-property investors.
Here is a follow-up to one of them:
In the first part of our discussion, you looked at the simple math that underlies Cash-on-Cash Return. The short version goes like this: First you calculate your property’s first-year cash flow before taxes—essentially all the cash that comes in from operating the property minus all the cash that goes out. Then you divide that by your initial cash investment, and that percentage is your Cash-on-Cash Return. Nothing could be simpler.
Simplicity is a good part of CoC’s … (0 comments)

real estate investment analysis: New educational articles for real estate investors - 09/27/13 08:52 AM
I've been remiss in not telling you that I've written several new articles recently and have a few more in the pipeline. So, here are some previews, with links to the full articles:
The Cash-on-Cash Conundrum, Part 1
Life is too complicated; we have too many choices, too many options, too many channels on cable TV. It’s not surprising that sometimes we crave simple answers to complex questions.
I see that mindset very often in my interactions with real estate investors. They yearn to embrace the “50% rule” or the “2% rule” or some other shortcut that will help them cut … (0 comments)

real estate investment analysis: e-Learning Portal for Commercial Real Estate Launches Thursday, May 16 - 05/15/13 08:25 AM
As many of you know, I teach real estate investment analysis in the Master of Science in Real Estate Development program at Columbia University. About a year ago I agreed to teach a similar course at a new online school dedicated exclusively to commercial real estate: Homburg Academy.
During the past several months I've been busy recording lectures for Homburg's academic program. The more I've worked with these folks, the more impressed I've become with their professionalism and their commitment to providing quality education for our industry.
On May 16, they are launching an online e-learning portal as an extension of the Academy; … (3 comments)

real estate investment analysis: Do you have a real estate website or blog? - 11/29/12 09:52 AM
Do you have a real estate website or blog? RealData Software has a new affiliate program where you can earn some meaningful commission income.
RealData has offered financial analysis software used by investors, developers, brokers, appraisers, lenders, accountants and many others for more than 30 years. We've stood the test of time and have always been fortunate to gain a good deal of our business from customer referrals.
You can now earn referral commissions by introducing our software to your online visitors.You can do this if you have a website, blog or newsletter that focuses on real estate, investing or finance. … (0 comments)

real estate investment analysis: My ebook for real estate investors is now free on Kindle and iTunes - 09/04/12 10:38 AM
My new ebook. "10 Commandments for Real Estate Investors," is currently available free.
You can get it for the Kindle here:  If you don't have a Kindle, you can download their free desktop reader.
It's also available for iPhone and iPad via itunes at
Here's the blurb from Amazon:
Real estate investing can be an excellent way to build wealth, but it can also be a snare for those who lack preparation, planning, and realistic expectations. In this brief but insightful series of essays, Frank Gallinelli, the author of the best-selling "What Every Real Estate Investor Needs to … (0 comments)

real estate investment analysis: New for 2012: Real Estate Investment Analysis, Version 16 - 01/10/12 02:12 PM
  Thirty years of development time, and of listening carefully to what to our customers want.  All this comes together now in the latest version of our most popular and powerful software app for real estate investors: Real Estate Investment Analysis, Version 16
What’s New in Version 16?
The Decision Maker The centerpiece of v16 is a new module called “The Decision Maker.” Here is how it works: Enter data about the property — revenue, expenses, financing, etc. — as you normally would.  Then go to the new module. The top half of the page will display … (0 comments)

real estate investment analysis: Frank Gallinelli to Speak at BiggerPockets Real Estate Investing Summit and Expo, March 23-24, 2012 - 01/04/12 10:22 AM
BiggerPockets -- an 85,000-member community of real estate investors -- is having its first Real Estate Investing Summit in Denver, March 2012, and has invited Frank Gallinelli as a featured speaker. Frank is the founder of RealData Software and the author of What Every Real Estate Investor Needs to Know About Cash Flow... and Mastering Real Estate Investment. He will speak on, "Real Estate Investment Analysis, Methods and Mindset -- What to Know, What to Do."

According to BP founder Josh Dorkin, "BiggerPockets is planning on having dozens of expert investors, commentators and educators speak to an audience that … (0 comments)

real estate investment analysis: The RealData Dispatch, Oct 2011 issue available - 10/25/11 10:32 AM
Our Oct 2011 newsletter, The RealData Dispatch, is available now, with new educational content for real estate investors and special offers:    subscribe @

real estate investment analysis: New Article... "For Real Estate Investors: A Lesson in Clarity" - 09/14/11 04:55 PM
Recently, I was conducting the last class in my course on real estate investment analysis that I teach in Columbia’s MSRED program.  I had assigned my 55 students a series of case studies (much like those in my book, Mastering Real Estate Investment) and told them to build financial pro forms and discuss the reasoning behind their analyses. After reading and commenting on all those analyses, I felt there was one overarching theme on which I wanted to focus my final remarks to the troops: The theme was “clarity.”
Trying to reduce a course to a single word might seem unrealistic … (0 comments)

real estate investment analysis: RealData's real estate investment analysis software now available for 30-day license - 07/18/11 11:57 AM
Just need to work though a single real estate investment deal, or compare a couple of properties so you can select the one that meets your criteria? If that's your situation, then we have big news: Starting today, you can get a cost-effective 30-day license to use RealData's Real Estate Investment Analysis software, Pro Edition -- the one that's been our most popular for almost 30 years.Kinda like renting a Lamborghini for a one-month road trip. Lots of horsepower, no sticker shock.Get the scoop at

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