An essential part of any real estate transaction is analyzing deals. The faster you identify the best real estate deals with a potentially high ROI, the sooner you can get to the closing table. But how will you streamline the process of deal analysis?
There are 10 real estate deal analyzer tools you can leverage for your business – Roofstock, Deal Check, BiggerPockets, RentZend, Trulia, Bankrate, Rentometer, Roofstock Cloudhouse, Mashvisor, and Realtor.com.
To learn more about these deal analyzers and determine which suits your real estate investing business best, read the rest of this blog!
Traditional real estate deal analysis follows a 5-step process. But ultimately, these steps will help you identify whether a deal can give you a steady cash flow or a high ROI.
The location of a property directly impacts how much you’ll make out of a deal. It affects the property value and property appreciation or depreciation as well as tenant demographics and rental rates if you’re planning to hold on to the property and use it as a rental.
To analyze the location of the investment property, get data about the economic growth of the area, the job opportunities there, the crime rates, local laws, and anything that can impact the price or your profit from the property.
You won't be able to fully analyze a real estate deal without data collection. Thus, you have to get data about a property's listing price, taxes, downpayment, mortgage, insurance, HOA fees, repairs and renovation needed, after repair value, maintenance, etc.
By getting accurate data for these expenses, you will be able to get an almost exact projected cash return.
If you are a buy and hold investor who plans to rent out the investment property, you also need to calculate the monthly cash flow to determine if the investment will be profitable. Ideally, the monthly income you'll get from the property is higher than your expenses.
The first thing you have to do here is identify an income estimate following the 2% rule or the monthly rent is 2% of the purchase price. After figuring out the estimated income, you then subtract the monthly expenses to get your expected revenue.
After calculating your monthly revenue, you also need to calculate your annual ROI if you're keeping the house as a rental. You can either use the net operating income or the gross rent multiplier so you can perform reverse valuation analysis afterward.
The net operating income calculates your annual revenue by deducting all the paid expenses, closing costs, and operating expenses of running a rental or investment property. Meanwhile, gross rent multiplier compares annual gross rent to the property's purchase price.
Running rental comps is also a critical part of a real estate deal analysis. This is done by comparing the investment property to the price of similar properties in the area that were recently sold to figure out profit projections.
There are many tools to calculate rental comps online (comparable rental listings app) as well as market statistics but most of the deal analyzers we included below already have this as a built-in feature.
Each real estate investing has its own unique needs. That said, we listed 11 real estate investment deal analyzers to ensure that all your bases are covered.
Roofstock has multiple tools you can leverage for deal analysis (profit projections). There’s the Roofstock Cloudhouse, Roofstock analyzer spreadsheet, and rental property analysis spreadsheet.
The Roofstock Cloudhouse provides real estate investors with a wealth of useful property description and information that can help assess rental investment potential. This real estate deal analyzer examines a property’s square footage, number of bedrooms and bathrooms, neighborhood evaluations, etc.
Meanwhile, the analyzer spreadsheet is a simple spreadsheet where you can view projected ROI, cash-on-cash return, cash flow, net income, cap rate, rent estimates, etc. Lastly, the rental property analysis spreadsheet is where you can enter data to calculate the investment potential of a property.
Deal Check can analyze flips, rental properties, investment properties, BRRRRs, and multi-family buildings so real estate investors stop relying on complicated excel spreadsheets.
This software can also help you calculate profits and determine the greatest real estate deals when you compare investment properties. Specifically, here’s what DealCheck's beautiful property reports can give you:
They offer a free Starter plan with limited features for a real estate deal analyzer. But they also have Plus and Pro plans for $10 and $20 respectively.
BiggerPockets offer a lot of calculators both real estate agents and other real estate investors can use to analyze real estate deals:
BiggerPockets believe that the math behind real estate investments doesn't have to be hard, perplexing, or sophisticated.
The calculators from BiggerPockets are made to assist you in maximizing your potential gain while minimizing your business risks, whether you are examining a real estate transaction for cash flow, assessing the potential of a fixer-upper, or wholesaling with other investors.
RentZend has a Flip Property Analysis Software that flippers can use to analyze investment properties and other deals. This is ideal for new flippers since it will give them a better understanding of what the numbers look like in general.
Here’s what exactly the software can do:
Although Trulia primarily offers real estate databases just like Zillow, it also has free mortgage niche tools that may be useful in doing analysis. Specifically, they have:
Moreover, they also have Trulia Estimates. This provides an estimation of a home's market value for your next real estate investment. Note, however, that it can only give you an estimate of how much a house is worth and it is not an alternative to appraisal or recent sales comps.
Bankrate is a pretty impressive tool you can use to check mortgage rates and payments and perform overall investment analysis.
It’s fairly simple to use, just key in the property price, percentage of down payment, and interest rate for your wholesale deals. After which, you can easily check the monthly mortgage costs to complete your entire investment analysis.
Ultimately, Bankrate can assist real estate investors in comparable properties, comparing rates and estimating ROI when making major financial decisions like investing in rental properties, investment properties, etc.
Currently, they have around 200 financial calculators such as for mortgages, house affordability, loans, cost of living, amortization, and paying off credit cards.
In order to help tenants and different real estate experts, Rentometer offers fast rental evaluations, rent comps, and in-depth property information.
They have meticulously developed an efficient rental data system over the past 15 years which covers not only rental data collection and surveys but also data staging and data analysis.
Currently, they employ a combination of automated rental data collection and a skillful team of rent researchers to gather and evaluate more than 10 million rental records yearly.
To ensure the accuracy of the data we send to the tenants and real estate professionals who are using our platform, every record passes through our in-house data staging process.
Deal Crunch is both a calculator and an analyzer. The plan they offer is pretty straightforward and cheap. Their bronze plan is free forever, while their gold plan is $15 per month. Here’s how Deal Crunch can help you:
The team behind Deal Crunch can help you 24/7 which is a plus if you work at night.
You can use Mashvisor to quickly determine the returns a property offers and what you'll need to improve on to do better than the current rental market. Three months of research may be completed in 15 minutes thanks to Mashvisor’s set of algorithms that are powered by machine intelligence.
Through Mashvisor, you can calculate the cap rate, median rent or average rent, tax benefits for current property owners, price-to-rent ratio, cash-on-cash returns, occupancy rates, recent sales, etc. They currently have lite, standard, and professional plans that range from $22.99 to $99.99.
At Realtor.com, you can look for homes for rent and sale like Zillow and Trulia. Also, you can compare property values because this instant deal analyzer offers data to compare properties.
Realtor.com also has an affordability calculator and a mortgage payments calculator. The affordability calculator will assist you in determining the price range of properties you can afford. This will be saved to your buyer profile so your property search is more targeted.
Meanwhile, when you use the mortgage calculator, you will receive a detailed breakdown of your closing costs as well as monthly mortgage expenses (debt coverage ratio) according to your financial status.
They can also connect you with investor-friendly lenders if you want.
Using real estate deal analyzers like the ones listed in this blog can exponentially help you close more deals, scale up, and achieve financial independence. Many crucial parts of deal analysis are already streamlined through these deal analyzers so whether you are a landlord, wholesaler, flipper, etc., you'll find them useful!
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