real-estate-investment

What this skill does

# 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:

1. **Define scope** — Identify property type, investment strategy, and target output format
2. **Gather data** — Collect property financials, market data, and comps (use API reference if automating)
3. **Build pro forma** — Construct income statement: Gross Rent → Vacancy → EGI → OpEx → NOI → Debt Service → Cash Flow
4. **Calculate returns** — Apply appropriate metrics (see Quick Reference below)
5. **Stress test** — Run sensitivity analysis, scenarios, or Monte Carlo simulation
6. **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.