Real Estate Pro Forma Software
Every Investor Needs

Launching Smart REIA Version 7.0

Begin by launching the latest version of Smart Real Estate Investment Analysis (REIA) 7.0. Older versions, including SFC 5.0, are being phased out.
Timestamp 00:01

Save and Refresh

Learn to use the “Save and Refresh” function frequently to save changes and refresh the inputs. Input cells are blue, while black and gray cells are for calculations.
Timestamp 00:31

Managing Subscriptions

Check your subscription status at the bottom of the interface. If needed, manage your subscription by clicking on the “Manage Subscription” link.
Timestamp 01:02

Creating and Managing Sheets

Click on “Create New” to generate a new sheet. Ensure that pop-ups are allowed in your browser to see the new sheet.
Timestamp 01:33

Using the Sidebar

Open the Smart REIA 7.0 sidebar to activate the sheet and begin your analysis. You can save sheets with different inputs to compare various financing options.
Timestamp 02:06

Customizing Currency and Units

Customize the currency symbol and unit of measurement according to your location and preference. Save and refresh after making changes.
Timestamp 02:37

Introduction to Smart REIA

Learn why Smart REIA is essential for property investors, providing insights into investment property costs and cash flow analysis.
Timestamp 00:00

Entering Property Details

Start by entering the basic details of the property, including address, analysis period, purchase price, purchase year, total area, and rentable area.
Timestamp 00:31

Adding Transfer Taxes and Closing Costs

Input additional costs such as stamp duty, transfer taxes, capital improvements, and closing costs, which are essential for accurate property analysis.
Timestamp 02:10

Understanding Sale Reversion Value

Learn about sale reversion value, which estimates the property’s selling price at the end of the analysis period, using either a growth rate or cap rate method.
Timestamp 03:11

Calculating Exit Sale Value*

Calculate the property’s future sale value by selecting an exit cap rate or manually entering an expected sale price, ensuring a realistic projection of returns.
Timestamp 05:14

Setting Borrowing Assumptions

Start by entering your borrowing assumptions, including the annual interest rate, loan-to-value ratio, and any applicable loan setup fees. Adjust exit fees based on your loan terms.
Timestamp 00:00

Choosing Loan Terms

Set the loan term, typically 30 years for residential properties, and specify any interest-only periods. This will influence your monthly payment calculations.
Timestamp 01:35

Entering Rental Income

Input the rental income, either as a weekly or monthly amount. Ensure you select one option to avoid errors, and estimate the annual rent escalation.
Timestamp 02:37

Adding Vacancy and Credit Allowance

Include a vacancy and credit allowance, typically around 3%, to account for potential rental income fluctuations. Adjust the discount rate as needed.
Timestamp 03:38

Understanding Discounted Cash Flow (DCF)

Learn about the DCF method for valuing a property, which discounts future cash flows to present value based on a discount rate.
Timestamp 04:43

Calculating Operating Expenses

Set your operating expense escalation rate, typically in line with inflation or CPI, to project future expenses accurately.
Timestamp 06:48

Incorporating Equity Dividend

Factor in the equity dividend, which accounts for the risk of the interest rate and helps calculate the weighted average cost of capital for the project.
Timestamp 07:40

Finalising Borrowing and Income Assumptions

Review and adjust all assumptions to ensure accurate projections of net present value, discounted cash flow, and overall project feasibility.
Timestamp 08:23

Understanding the Income Section

Start by entering your gross income and any assumptions about its escalation over the analysis period, such as annual raises in line with the Consumer Price Index (CPI).
Timestamp 00:01

Entering Taxable Deductions and Household Expenses

Input any taxable deductions and estimate household expenses. Set escalation rates for both to match expected inflation or changes in your financial situation.
Timestamp 01:02

Adjusting Tax Brackets

If applicable, customize the tax brackets based on your location by entering the correct rates for different income levels.
Timestamp 02:04

Calculating Monthly and Annual Expenses

Enter detailed household expenses such as groceries, insurance, and utilities. Use the “Save and Refresh” function to update the calculations and ensure accuracy.
Timestamp 03:07

Adjusting the Analysis Period

Start by setting the analysis period for your property investment. Adjust the duration and press “Save and Refresh” to update all related calculations.
Timestamp 00:00

Setting Gross Operating Income

Enter the annual gross rent escalation percentage to model how rent will increase over time. You can also manually adjust the rent for specific years.
Timestamp 01:03

Including Other Income Sources

Add any additional income sources, such as vending machines or parking fees, to your gross operating income. This will give a complete picture of the property’s income.
Timestamp 02:36

Calculating Effective Gross Income

Review the calculated effective gross income, which accounts for vacancy and credit allowances. This figure represents the total income you can expect from the property.
Timestamp 03:07

Entering Operating Expenses

Begin by inputting your operating expenses, such as insurance, broadband, and miscellaneous costs. These values are entered annually.
Timestamp 00:00

Setting Escalation Rates

Adjust the escalation rates for your operating expenses. You can apply a standard rate or manually override it for specific years.
Timestamp 01:04

Customizing Escalation Rates for Specific Expenses

If needed, manually adjust the escalation rate for a particular year or expense. This will override the default rate applied.
Timestamp 02:05

Reviewing Operating Expenses Summary

After entering all necessary inputs, review the operating expenses summary to ensure everything is correctly escalated and calculated.
Timestamp 02:40

Entering Capital Improvements and Depreciation

Start by manually entering any capital improvements (CapEx) and depreciation on the property. This includes both real property depreciation and improvements.
Timestamp 00:00

Adding Amortization and Closing Costs

Input any amortization and closing costs related to the property. Include any interest income generated during the period as well.
Timestamp 01:01

Reviewing Internal Rate of Return (IRR)

Analyze the internal rate of return (IRR) for each year of holding the property. This helps determine whether the investment is worthwhile based on your assumptions.
Timestamp 01:35

Publishing and Sharing the Report

Once all data is entered, you can publish the summary report. This allows you to share the analysis with others and review the automatically generated graphs and breakdowns.
Timestamp 02:36

Understanding Decision Metrics

Begin by exploring the different decision metrics that help determine whether to proceed with a project. These include averages, comparisons, and key financial indicators.
Timestamp 00:00

Comparing Properties

Learn how to compare different properties side by side by creating multiple copies of the same feasibility study and adjusting assumptions for each scenario.
Timestamp 01:03

Finance Assumptions and Ratios

Understand the financial assumptions and ratios, such as lender’s yield, debt coverage ratio, and break-even ratio, which are critical for evaluating the feasibility of the project.
Timestamp 02:06

Analyzing Key Metrics: IRR, Cash on Cash Return, NPV

Review key metrics like Internal Rate of Return (IRR), Cash on Cash Return, and Net Present Value (NPV), which provide a snapshot of the project’s financial health.
Timestamp 03:07

Capitalization Rate and Rental Yields

Examine the property’s capitalization rate, exit value cap rate, and rental yields, which help estimate future income and potential sale value.
Timestamp 04:11

Growth on Equity Return

Learn how to assess the growth on equity return, which shows how much equity is being built up over time and the return generated from it.
Timestamp 05:13

Understanding Cash Flow and Debt Service

Delve into the cash flow from operations, debt service, and net cash position, which combine property income and taxable income to give a complete financial picture.
Timestamp 06:26

Using the IRR Matrix

Explore the IRR Matrix to determine the best time to sell the property for maximum return, based on the internal rate of return over different holding periods.
Timestamp 07:17

Adjusting Analysis Based on NOI Cap Rate

Learn how to adjust the analysis using the NOI cap rate to reflect changes in property value and potential sale proceeds.
Timestamp 08:33

Calculating Profit Before Tax and Discounted Cash Flow

Review the final calculations for profit before tax, discounted cash flow, and the two different IRRs, which help in making an informed decision.
Timestamp 10:02

Smart REIA - Real Estate Pro Forma

With Smart REIA, you can easily duplicate a project by selecting "Save as", change assumptions, holding period, expenses, interest rates etc. without having to re-enter the data and compare results of the same or different properties to make a decision.

Because each pro forma can be published, you can open any number of tabs in your browser window to compare "any" number of properties and see how they will perform with different assumptions.

Why Smart REIA - Is Better Than
Cumbersome Excel Templates?

With so many real estate pro forma softwares and excel templates on the market can it be confusing. And the last thing you need is another waste-of-money tool sitting on your laptop. Here is a brief summary of some of the powerful (and unique) features included in
Smart REIA (Real Estate Investment Analysis)
The Real Estate Pro Forma Software