Unlike many other real estate themed templates, this modern theme is customized so you can actually display your listings, write articles, create pages, and even have your own blog all-in-one. You can’t beat that functionality.

Once you view the live demo, you’ll notice that the home page has an animated rotating sideshow so you can easily display your top listings. The theme designer and developer cleverly used WordPress categories to create a real estate search engine of sorts that highlights all of a brokerage’s or agent’s listings.

Below you will see what a single listing page looks like. It’s very clean and provides a large photo spot and main description towards the top. Following that area is a “Property Details” and “Additional Photos” sections. I can only say so much about this theme. It’s just better if you see it in action for yourself.

With this package you get unlimited theme support and customization techniques with detailed theme tutorials. Brian Gardner is the designer behind this beauty and he’s got several other templates as well. If you are looking for a low-cost and high-quality premium WordPress theme then this is just for you. I personally have purchased one of his other themes (Revolution Sports) which is actually what this real estate blog uses.

To have this sort of custom design done for your blog would easily cost several hundred dollars. On top of that, you’d have to pay a web developer to code this into a WordPress theme. Essencially you would pay close to $1,000 for this! The good news? This template costs only $59.95 or you can buy the entire set of his amazing premium WordPress themes for $199.95! You also get instant access to download it right after you pay. Credit card or PayPal are both accepted.

I promise you won’t be disappointed with this theme. Keep in mind though after you purchase it, you’ll need to spend at least 1 hour getting everything configured.

The second part of printing brochures has to do with convience. I like being able to handle any brochure printing needs with ease and one such solution is to use an online printing company. After doing some searching online, I ended up finding such a service called www.psprint.com. I have yet to use their offerings but when the time comes, I’m sure to give them a try.

Has anyone else tried an online printing service before? If so, what were your experiences? I’d like to think most online businesses are legit but without a positive review from a nuetral person, it’s hard to trust a site.

This case study analyzes real world properties using real estate investment analysis software by GreyStone Analytics (full disclosure: I’m the founder and CEO of GreyStone Analytics, so please forgive any bias). The goal of the study is not to promote a particular software product, but to show how such analysis tools can help investors make profitable decisions.

The scenario: You have $25,000 you want to invest in real estate. You want to maximize your financial return while minimizing risk.

The problem: There are several properties to choose from in your area. How do you select the right one? You need an effective way to evaluate and compare investment financials.

The solution: Use real estate investment analysis software to quickly, simply and effectively evaluate the financial viability and risk of all your options.

About the Property

As the basis for this case study, I looked through real estate listings in my hometown of York, PA. There were several listings that met the criteria for the investor scenario described above. Let’s start by looking at one property in particular:

Property A (Codorus Manor):
Purchase Price: $159,900
Number of Units: 4
Total Monthly Rent: $2,125
Property Tax: $3,150
Other Operating Costs: $580/month (property management) + $100/month (maintenance)
Closing Costs: $3,000
Estimated Cost of Resale: 7.0% of sales price
Loan: 30-year fixed rate @ 6.000%

Of the $25,000 the investor has to invest, we assume $3,000 goes to closing costs and the remaining $22,000 is used as a down payment. That translates into a loan of $137,900 ($159,900 purchase price MINUS $22,000 down payment).

Before diving into the analysis, we need to make a few more assumptions regarding future revenue, costs and resale valuation. While it’s difficult to accurately predict future market trends, the GreyStone software automatically displays historical zip code-level market data to provide context for these assumptions. For instance, Property A is in the 17404 zip code. According to the software, the median rent for this zip code increased by an average annual rate of 2.7% (from 1990 to 2000). The user can modify the assumption based on his/her knowledge of the market, but for purposes of this analysis we’ll use the historical rate of 2.7%. We assume operating costs and taxes increase by 2.0% annually, and the property has an average vacancy rate of 3.0%.

Similarly, we must make assumptions regarding the property’s resale value. Most software packages allow you to choose from a few different valuation methodologies. The GreyStone software, for instance, allows you to estimate the property’s future value using any one of the following methods:

• Annual Appreciation
• Cap Rate (based on current year Net Operating Income)
• Cap Rate (based on next year Net Operating Income)
• Gross Rent Multiplier

For purposes of this example, we’ll use the annual appreciation method. Again, we’ll apply the historical market data from the software, which shows a 3.5% annual increase in median home value for the zip code.

While the software lets you go into much more detail (e.g., capital expenses, variable interest rates, interest only/balloon loans, refinancing, passive loss assumptions, unit level revenue/vacancy assumptions, reimbursable expenses, etc.), we’ll keep this example relatively simple.

The software walks the user through a set of input screens: Property, Loan, Revenue, and Costs. An example of the Property input screen is shown below (note, the Market Data in the lower-left corner is automatically generated by the software, based on the zip code entered by the user).

Figure 1. Property Input (click to enlarge)

Looking at the Numbers
Once all the inputs are entered, the financial analysis is automatically generated by the software. So rather than trying to calculate the financials yourself, you can put the power of the software to work for you. Let’s first look at cash flow.

Figure 2. Operating Cash Flow Output: Chart (click to enlarge)

Figure 2 shows the investment property generates a cash flow (after tax) of $3,326 in year 1, growing to $6,280 in year 10. Annual cash flow continues to rise over the course of the analysis as rent increases outpace expected operating expense increases. If you’re interested in looking at the detail behind these figures, the investor can select the Operating Cash Flow table (shown in Figure 3).

Figure 3. Operating Cash Flow Output: Table (click to enlarge)

While cash flow is helpful in understanding annual cash generated by the property, we need to look at other metrics to answer the fundamental question: Is this property a good investment? To answer this, let’s look at the investment return metrics (Figures 4 and 5).

Figure 4. Investment Return Output: Chart (click to enlarge)

There are several worthwhile metrics to look at here, but let’s start with Net Return on Investment (ROI). In this case, Net ROI is defined as the total profit generated by the investment (after tax). For instance, in the above example the investor would enjoy a profit of $35,150 if the property were sold at the end of year 5. For many investors, this is the most straight-forward way of analyzing an investment. I like to think of it as the “show me the money” approach. And if the investor were to hold onto the property for 10 years, he would enjoy a profit of $98,215. On an initial investment of $25,000, these returns look pretty good.

Figure 5. Investment Return Output: Table (click to enlarge)

Another powerful metric at the investor’s disposal is the Internal Rate of Return (IRR). In the above example, the IRR (after tax) in year 5 is 23.1%. In general, if the IRR is greater than your expected return from an alternate investment (e.g., stocks, money market account), then it’s a good investment. There are definite pros and cons to using IRR, which deserves a more thorough discussion than the one provided here, but suffice it to say an IRR of 23.1% is better than most investments (certainly beats the 0.05% annual interest on my Wells Fargo checking account).

Quantifying Risk
Based on the analysis so far, the property looks like an excellent investment candidate. However, before making a “go/no-go” decision, we need to look at the risk analysis and compare the financials to other investment opportunities.

Suppose the investor was confident he could buy the property at the assumed purchase price ($159,900), but was less certain about some of the other assumptions—such as resale value, operating income and costs. The GreyStone software allows the investor to set a “risk level” for each of these input assumptions, then uses this information to run 10,000 simulations and displays a range of financial outcomes with associated probabilities. (This methodology is known as Monte Carlo simulation, which is used extensively in scientific and financial analyses to address uncertainty.)

For instance, in Figure 6, the investor has set the risk factor for individual input assumptions and run the analysis for Net ROI in year 5. The analysis reveals there is an 80% chance the year 5 ROI will fall between $11,474 and $59,304, with a 10% chance ROI will be below $11,474 and a 10% chance ROI will be above $59,304. The risk analysis gives the investor a sense of the potential upside and downside to the investment property financials. So while the initial financial analysis may look good to an investor, the risk analysis may show a downside exposure that is greater than the investor can tolerate. This is the power of risk analysis.

Figure 6. Risk & Sensitivity Output: Monte Carlo Simulation (click to enlarge)

Comparing Properties
Now suppose the investor did a similar analysis for a different property he was considering (I won’t bore you with the details). The software allows the investor to compare the financials for the two properties side-by-side. Figure 7 shows such a comparison. Based on the example in Figure 7, our initial property (Codorus Manor) has a superior ROI compared to the second property (Yorktowne Condo) over the entire 30-year analysis period. Similar side-by-side financial comparisons can be made for other key metrics, such as IRR and NPV (Net Present Value).

Figure 7. Risk & Sensitivity Output: Property Comparison (click to enlarge)

While individual investor criteria will vary, Property A (Codorus Manor) looks like a good investment opportunity with a relatively low risk profile.

Other Benefits
One other useful component of real estate investment software is the Help tool, which provides on-demand descriptions and formulas for the inputs and outputs used in the analysis. This is a valuable aid while using the software, and also helps the investor gain a greater understanding of real estate investment analysis in general. For instance, if you were unfamiliar with the term Cap Rate, the Help tool provides a description of the term and a formula for how it is calculated (see Figure 8).

Figure 8. Help Tool Example: Cap Rate (click to enlarge)

Final Thoughts
There you have it. You probably need a few extra shots of caffeine if you made it this far! There’s a lot more we could cover, but this case study provides a high level example of how real estate software can be used to evaluate an investment opportunity. You don’t need a Ph.D. in Finance to thoroughly analyze the potential value of an investment property, but you do need the right tools. I certainly encourage any interested investors to take a look at GreyStone’s website: http://www.greystoneanalytics.com. There’s a free trial version if you want to test it out.

And even if our product isn’t your cup of tea, I would strongly recommend looking at other real estate investment analysis software packages (a quick search on Google should do the trick). It’s a very small price to pay compared to the potential value of your real estate investment.

Good luck to everyone and happy investing!

About the Author: Bill Christensen is the founder and CEO of GreyStone Analytics, LLC. If you have any questions or comments, you can contact Bill directly at billc [at] greystoneanalytics [dot] com.

There’s a free online property analysis tool where you can create, save, and print graphical reports displaying rate of return, cash flow, expenses, and more. I use it all the time whenever I come across a potential investment property even if an APOD (Annual Property Operating Data) is provided. It’s web-based so I can input and access the data from anywhere while I travel.

Here’s a sample analysis of what you get. For example, you plug in the purchase price, closing costs, down payment, estimated expenses, market assumptions, and more. After you enter the data and save it, you’ll see if it flows. Check out Real Estate Critic and see for yourself. Did I mention it’s free? Can’t beat that.

The most successful real estate investors out there today all have some sort of trust set up for each and every one of their real estate properties. This could be just their primary residence, or it could be dozens of apartment buildings they own. Since real estate deeds are a publicly accessible document, it means anybody can find out whose name is on title for a specific address. This type of trust structure which is better known as a Living Trust or Master Protection Trust is very useful for your real estate investments. It has many benefits one of which is especially important to celebrities and wealthy individuals. Do you think that Donald Trump or Bill Gates is names are listed as the owner of any property title document? I don’t think so.

I’m guessing that most of you aren’t celebrities or extremely well-off individuals so protecting your name isn’t as important as it is to them. But nevertheless keeping your identity hidden and assets protected is still very important. Let’s say for example someone gets his seriously injured on one of your properties and they decide to sue you for millions of dollars. Now your landlord insurance policy will cover a certain amount depending of course on your liability coverage but it won’t cover anything on top of that. So when this injured tenant of yours decides to personally chase after the owner of the building he’ll only be able to find the name of the trust listed on the title document. This prevents him and his lawyer from coming directly after you in hopes of obtaining additional money.

An easier way to visualize this is to think of a company like Google. Say one of Google’s employees gets injured by another co-workers pet rock. This employee’s lawyer cannot sue the pet rock owner directly since they are protected by Google Corp.. The lawyer has to then sue Google Corp. and cannot go after the co-workers personal belongings or wealth.

I am actually in the process now of working with a real estate attorney to set up a Master Protection Trust. I at first didn’t want to spend the $5,000 in legal fees and paperwork but then realized for someone who owns multiple properties it makes good business sense. So right now each one of my investment properties has title in my personal name but now needs to be moved into individual land trusts. Here is an illustration of how I plan on structuring everything.

So as you can see, the shell of the structure is the Master Protection Trust which is a rollup and direct holding of all assets. Underneath it is the second layer of protection and could potentially be any sort of corporation but in this instance I’m using a limited liability corporation (LLC). Then rolling up to the LLC are my real estate investment properties. So each one of these investment properties will be moved out of my personal name and into a new land trust name. You can call each one of these properties any name you want but most commonly I’ve seen the address of the property used as the land trust name. This makes it simple to know and keep track of each one of your investment properties especially if you continue to acquire more. You can of course have more than four as the illustration above is just a basic example of how you would construct this sort of protection for yourself.

Now it does take time and money to set up this sort of protection and structure and if I knew about this before acquiring multiple properties in my personal name I would’ve done this long ago. Even if you have just your personal residence or one investment property, I would highly recommend contacting your local real estate attorney to help draft these documents for your protection and peace of mind.

Normally, if you are buying a property that is listed with a real estate broker, they will have a purchase agreement ready to have the blanks filled in. If you have a buyer’s agent that you work with, he or she will have the necessary forms. There are the routine parts which are necessary, but not easily forgotten or done wrong. These include the following.

The Date – Names of Buyer(s) and Seller(s) – Address Of Property – Legal Description Of Property – Purchase Price And Terms – List Of Anything Included With Property – Date The Deal Should Close By – Closing Process – Disclosure Statement – Signature With Date For Buyer And Seller – Addresses and Phone Numbers Of Buyer And Seller.

These may be routine items, but be sure that you look all of this over carefully. If the disclosure statement clearly states that there is a foundation problem, for example, you can’t later get out of the deal when those cracks in the basement make you nervous. With the following items, be especially careful.

Real Estate Purchase Agreement – The Crucial Items

Good Faith Deposit or Earnest Money – Real estate agents will try to convince you that your deposit should be as much as possible. There is no “normal” amount, and while it’s true that a seller might take an offer more seriously with a bigger deposit, this is up to you. Real estate is regularly bought with $500 deposits. An alternative is to include a deposit of $200, and the line, “to be increased to $2,000 when all contingencies are satisfied.” That way if the inspection shows nasty surprises your money isn’t tied up while the seller argues that there isn’t a problem.

Designation Of Who Pays What – Make sure the agreement clearly states who will pay for what. Are you splitting the cost of the fee paid to the closing company? Who is paying each of the other closing costs. If it doesn’t state in the purchase agreement that the seller is paying, expect that you are.

Financing Contingency – Unless you are paying cash, you will probably have to get a loan. A Pre-approval from the bank doesn’t guarantee much, so be sure that you make the agreement contingent on getting that loan, and specify the terms. For example, it might read, “This offer is contingent on buyer obtaining a mortgage loan within seven days, at 7.5% annual interest or less.”

Inspection Contingency – You may not need an inspection if you are buying land, but with residential real estate an inspection is a good idea. Generally, the clause for this will allow you about a week or ten days to get it done. It might read something like this: “This offer is contingent on an inspection of the property at buyer’s expense, and buyer’s approval of the results of that inspection within seven days.”

Other Terms, Conditions or Contingencies – There are sometimes other issues, and you have to address them in the real estate purchase agreement. For example, if the back yard is full of junk cars, you better add a clause like, “All cars and junk to be removed at seller’s expense before closing.” If you are shopping alone but your wife needs to approve the home, you could also add a clause like, “Offer is subject to a approval by spouse within two days.” Then your wife can look at the house later and say yes or no to the deal. As you can imagine, sellers may not like that one.

If you are not working with an agent, you can buy an agreement (sometimes called an “offer to purchase” or “buy-sell agreement”) online or in some office supply stores. Having a lawyer review all the paperwork is best. Remember that a real estate purchase agreement is a binding contract the moment you and the other party sign it.

Find your dream second home or go global with your real estate investing plan by using this cool property aggregation website. It costs nothing to use and would be a great excuse to find a potential investment property to fly out and see and write off the whole trip!

Here’s a quick list of the top home valuation (or home tool) websites I’ve recently come across listed in no particular order:

1. Auctioncloud.com – An innovative way to view eBay residential real estate auctions.
2. Zillow.com – An online real estate service providing valuable tools and information.
3. Eppraisal.com – Provides free home appraisals (still rather new and unproven).
4. Homegain.com – Provides information and resources to guide owners and buyers through the process of selling and buying a house.
5. Loopnet.com – Excellent tool for finding commercial real estate property for sale.

Now these are just a couple of sites I’d recommend you definitely check out. There are many more out there and the ZipRealty blog mentions a couple more as well.

Tip: I’ve created a special folder within my web browser dedicated just to real estate websites. When I find something interesting or a website I might later need in the future, I’ll bookmark it and place it in this folder. If you don’t already I’d recommend you do the same. it’s a great way to build up some resources to help you become successful real estate investor.

The Internet is an amazing resource and can save you a lot of time by learning about real estate investing from blogs such as mine or other real estate sites with free information.