Real Estate Investment Analysis

Comprehensive real estate investment analysis — from deal screening through financial modeling to investor-ready output. Covers all property types, standard and advanced metrics, code generation, and tax-aware structuring.

Analysis Workflow

Follow this 6-step process for any deal or market analysis:

• Define scope — Identify property type, investment strategy, and target output format

• Gather data — Collect property financials, market data, and comps (use API reference if automating)

• Build pro forma — Construct income statement: Gross Rent → Vacancy → EGI → OpEx → NOI → Debt Service → Cash Flow

• Calculate returns — Apply appropriate metrics (see Quick Reference below)

• Stress test — Run sensitivity analysis, scenarios, or Monte Carlo simulation

• Report — Generate investor-ready output with recommendations

Quick Reference — Core Metrics

Metric Formula Typical Range

NOI Effective Gross Income - Operating Expenses Varies by asset

Cap Rate NOI / Property Value 4-10% (market-dependent)

Cash-on-Cash Annual Pre-Tax Cash Flow / Total Cash Invested 8-12% target

DSCR NOI / Annual Debt Service 1.2x+ (lender minimum)

IRR Discount rate zeroing NPV of all cash flows 15-20% target

Equity Multiple Total Distributions / Total Capital Invested 2.0x+ over hold

GRM Property Price / Annual Gross Rent 8-15 (lower = better)

Break-even Occ. (OpEx + Debt Service) / Potential Gross Income <85% preferred

For complete formulas, Python code, and Excel equivalents → load references/financial-metrics.md

Property Type Router

Select the analysis framework based on property type:

Property Type Key Metrics Rules of Thumb Reference

SFR / Small Multi (1-4) CoC, Cap Rate, DSCR 1% rule, 50% rule, 70% rule references/property-types.md §Residential

BRRRR ARV, Rehab ROI, Refi LTV 70% rule: Max buy = 70% ARV - repairs references/property-types.md §Residential

House Hack Effective housing cost, FHA terms 3.5% down FHA, self-sufficiency test references/property-types.md §Residential

Large Multifamily (5+) Per-unit metrics, NOI, Cap Rate OpEx ratio 35-45% references/property-types.md §Commercial

Commercial (Office/Retail) Per-SF metrics, lease analysis NNN vs Gross lease impact references/property-types.md §Commercial

Short-Term Rental RevPAR, ADR, Occupancy Revenue = ADR x Occ x 365 - fees references/property-types.md §STR

Land / Development Absorption rate, dev pro forma Total cost vs projected value references/property-types.md §Land

Analysis Type Router

Select the analysis methodology based on what the user needs:

Need Method Reference File

Run the numbers on a deal Pro forma + core metrics references/financial-metrics.md

Stress test assumptions Sensitivity analysis (bear/base/bull) references/advanced-analysis.md §Sensitivity

Model uncertainty/risk Monte Carlo simulation references/advanced-analysis.md §MonteCarlo

Syndication distributions Waterfall modeling (GP/LP splits) references/advanced-analysis.md §Waterfall

Compare/score markets Market scoring framework references/market-analysis.md §Scoring

Pull market data via API API integration patterns references/market-analysis.md §APIs

Find and adjust comps Comparable analysis references/market-analysis.md §Comps

Optimize tax impact Depreciation, cost seg, 1031 references/tax-strategy.md

Choose entity structure LLC, LP, S-Corp comparison references/tax-strategy.md §Entity

Output Format Selection

Adapt output to the user's request:

Spreadsheet-ready — Generate formatted tables with formulas. Use pandas DataFrames exported to CSV/Excel. Include Excel formula equivalents for each calculation.

Decision framework — Provide structured narrative analysis with go/no-go recommendation. Include risk factors, key assumptions, and sensitivity ranges.

Code generation — Produce Python scripts using numpy-financial and pandas. Include complete, runnable pro forma models, Monte Carlo simulators, or waterfall calculators.

Investor report — Combine all three: executive summary, financial tables, risk analysis, and appendix with methodology.

Operating Expense Benchmarks by Property Type

Property Type OpEx Ratio (% of EGI) Management Fee

Single-Family Rental 35-50% 8-10%

Small Multifamily (2-4) 35-45% 8-10%

Large Multifamily (5+) 35-45% 5-8%

Office 35-55% 3-5%

Retail (NNN) 15-25% 3-5%

Retail (Gross) 60-80% 3-5%

Industrial 15-25% 3-5%

Short-Term Rental 50-65% 20-25%

Key Tax Thresholds (2025-2026)

Strategy Key Detail

Depreciation Residential: 27.5yr, Commercial: 39yr (straight-line)

Bonus Depreciation 100% for property placed in service Jan 20, 2025 – Dec 31, 2030

Cost Segregation Reclassify 15-40% of building into 5/7/15-yr assets

Section 179 $2.5M max deduction (2025), phase-out at $4M

1031 Exchange 45-day ID period, 180-day closing, like-kind real property only

Opportunity Zones Made permanent (2025), 10-year gain exclusion on QOF investment

For complete tax analysis with IRS code references → load references/tax-strategy.md

API Quick Reference

Provider Best For Pricing Auth

Mashvisor STR + LTR rental data $30-$120/mo x-api-key header

AirDNA STR performance data $12-$599/mo Bearer token

ATTOM Deep property data (155M+ properties) $850-$2K/mo apikey param

Rentcast Rental estimates Free-$449/mo (50 free/mo) X-Api-Key header

Census Bureau Demographics, housing Free (API key required) key param

Redfin Data Center Market trends Free (CSV download) None

For endpoint URLs, Python examples, and integration patterns → load references/market-analysis.md

Waterfall Distribution Quick Reference

Standard syndication tiers:

Tier IRR Hurdle LP Share GP Share

1 (Return of Capital + Pref) 0-8% 100% 0%

2 (First Promote) 8-12% 90% 10%

3 (Second Promote) 12-18% 80% 20%

4 (Final Split) 18%+ 60% 40%

Market data: 8% pref in 40% of deals, 10% pref in 30% of deals. 85% of waterfalls use IRR hurdles.

For complete waterfall mechanics, catch-up provisions, and Python calculator → load references/advanced-analysis.md

Reference File Index

Load the appropriate reference file based on the analysis need:

File Contents When to Load

references/financial-metrics.md

12 metrics with formulas, Python functions, Excel formulas, complete RealEstateProForma class, amortization schedules Building a pro forma, calculating returns, generating Python/Excel models

references/advanced-analysis.md

Sensitivity tables, Monte Carlo simulation (Python), waterfall calculator, syndication LP/GP mechanics Stress testing deals, modeling risk, syndication analysis

references/property-types.md

BRRRR framework, house hack analysis, commercial underwriting, STR revenue modeling, land development feasibility Analyzing a specific property type with tailored frameworks

references/market-analysis.md

Market scoring with 15+ indicators, 6 API integrations with Python code, comp adjustment methodology, submarket signals Comparing markets, pulling data via APIs, running comps

references/tax-strategy.md

Depreciation schedules, cost segregation savings, 1031 exchange rules, bonus depreciation (2025-2030), opportunity zones, entity structure comparison Tax-optimizing a deal, choosing entity structure, planning exchanges

Audience Adaptation

• Beginner investors: Explain metric meanings, recommend starting with the 1% rule and cash-on-cash return, walk through pro forma line by line

• Experienced investors: Skip basics, lead with IRR and equity multiple, provide code/spreadsheet output, focus on sensitivity analysis and tax optimization

• Default to expert-level analysis unless context suggests otherwise