Commercial Real Estate Investment Software
I'm new to commercial real estate and my broker has been flooding me with possible investment opportunities. Is anyone aware of any software that will help me to better understand the return on the opportunities my broker has sent over? This isn't a big investment ($2.5M +/-) but the reports my broker is sending over aren't personalized for me at all. They have the listing broker's estimate of rental rates, vacancy, etc. which seem a bit far from reality. Some friends have suggested building a custom spreadsheet, but I really don't understand Excel or want to take the time to learn it.  Any suggestions? 
[{"id": "cvjryov", "text": "This is your brokers job.  Marketing packs are good for first passes though.  If you have sincere interest in a property (ie you intend to make an offer) they should be willing to do this analysis for you.  \n\nThe closest software to what you want would be like Argos and its way over kill probably for what you are doing and very expensive.  Excel is commonly used for the type of analysis you are talking about.", "replies": [{"id": "cvjsnhm", "text": "~~Argos~~ Argus", "replies": [{"id": "cvjtp0z", "text": "Argus DCF but version 16 is hundreds if not thousands a month for a license", "replies": [{"id": "cvln81r", "text": "not to mention if excel is too complicated to learn I don't see him doing a bunch of argus training", "replies": [{"id": "cvlrh84", "text": "It sounds like he needs to hire a part time analyst to advise him", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "cvjtien", "text": "At the most basic level you should develop a solid understanding of cap rates (NOI/Price). You should know everything that goes into Net Operating Income (NOI) so you can question assumptions made in marketing materials - particularly lease rates, vacancy rates, and expenses. Sticking to these basics will help you a lot, and may be all you need. Beyond that you can get into projections over say a 5-10 year time horizon if you feel like it. That said, cap rate is pretty much the standard basis for comparison.", "replies": [], "depth": 1}, {"id": "cvjtnf1", "text": "Excel is what you need if they were larger deals (10m+ with multiple tenants) it would possibly use Argus look up Excel proformas and learn how to make a basic one with inputs for your scenario.", "replies": [], "depth": 1}, {"id": "cvk1g4v", "text": "No excuse not to know excel with $2.5M on the line. ", "replies": [], "depth": 1}, {"id": "cvk6tu0", "text": "How do you have $2.5M and no idea how to calculate a return? Software won't help you estimate rental rates or vacancy, that's something you learn from looking at actual comparable buildings/knowing the market. \n\nAlso, you're thinking about Excel all wrong, it's today's equivalent of a calculator.  It's just a tool to do math, if you can't handle it you'll have trouble with other software.\n\n", "replies": [{"id": "cvkmuyr", "text": "I certainly don't have $2.5M -- the purchase price would be around $2.5M with a moderate down payment. I do know how to calculate a basic return and have some past experience with residential rental properties. I was more asking if there was any easy to use out of the box software out there that could help me out. Maybe I'll dive into Excel, I've just found it to be unreliable in the past. ", "replies": [{"id": "cvko9fq", "text": "Excel is NEVER unreliable... maybe your inputs were unreliable... garbage in, garbage out. \n\nExcel is a tool - how effectively you use that tool depends on your skill level.", "replies": [{"id": "cvzeqej", "text": "It's not necessary for you to drive home your point in an argumentative fashion.", "replies": [{"id": "cw24glg", "text": "That wasn't being argumentative, just stating facts... ", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "cvksm8b", "text": "Ah, okay. That makes more sense. \n\nI find the commercial property calculations simpler than residential. \n\nMost commercial deals I see are cap-rate driven. You'll see them usually around 7-10% depending on the market. \n\nA 7% CAP on a $2.5M property should generate $175k NOI. It's easy to figure out the NOI if they're under a NNN lease, if not then you'll have to estimate operating costs and take it out of gross revenue to get NOI.\n\nLet's assume you put 20% down and take out a $2M loan, 5%APR, 20y amortization would give you an annual debt service of about $157k/yr, leaving only $18k in profit or a 3.6% cash-on-cash, pretty crappy.\n\nAt a 9% CAP rate you're getting $225k in annual revenue. Assuming your financing terms are the same you're now making a net profit of $68k and a cash on cash return of 13.6%. Now we're talking..\n\nThose are easy calcs, all you need is a calculator.\n\nIf you want to calculate IRR's or NPV's, you can also do them on a calculator, but Excel makes them simpler, IMO.  I like IRR when you're looking at a lease that has an escalator. ", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "cvkgaqv", "text": "First - Breathe.  Second - Set a timeline to make a decision (i.e. -\"by the end of this week I will make a go or no go DECISION).\n\nMy personal opinion is to save the $2.5MN for the next down cycle.  CRE is very expensive right now and few good deals exists.  BUT, if you like your broker and you'll enjoy working through a financial gauntlet capable of extreme wealth or bankruptcy, go for it.", "replies": [], "depth": 1}, {"id": "cvki1cp", "text": "ARGUS", "replies": [], "depth": 1}, {"id": "cvkmdbg", "text": "Cre_investor, I feel your pain. As others have mentioned this is an exciting time for you, but breathe! Look at ARGUS Express (www.argusexpress.com). I signed up for their free beta a few weeks ago. It looks like they may be charging for it now after a free trial, but I can contact them and see if they'll let you in. There is an entire section on assumptions for market rents, inflation, renewal percentage. I have even used it to share examples of my ideal investment back with my broker to give him a better idea of the type of investment I wanted. He was impressed. Let me know. ", "replies": [{"id": "cvkn307", "text": "Thanks. Looking at the site now. I didn't see it listed on their web page.", "replies": [], "depth": 2}, {"id": "czgsjls", "text": "I don't see Argus Express offered on their website anywhere. Do you know anything about their new Argus On-Demand product? Looks like I can get the full Argus for $400/mo. and cancel when I don't need it anymore. http://www.argussoftware.com/argus-on-demand/", "replies": [], "depth": 2}], "depth": 1}, {"id": "cvz444k", "text": "Theres a ton of info online. Search IRR real estate finance models and a few should come up. I am surprised your broker hasn't shown you how to do this or trained you on at least one?? I am not a broker or agent or anything so i don't if this is normal..\nedit: I am an idiot. You are the investor lol. Thought you were an agent", "replies": [], "depth": 1}]