How MogulMind Gets Its Data & Why You Need It

Greetings, and welcome to the first of a four part series. We get a lot of questions about the sources of our data, and how the calculations are made. These four posts hope to clear up the confusion, once and for all.

MogulMind’s property data (current value, bedrooms, bathrooms, etc.) is provided by Zillow. MogulMind has an agreement with Zillow which allows MogulMind to query and access its property information via the magic of the Internet. We then provide this information to you, always as we receive it, and sometimes plugged into our investment calculators.

Beyond that, the calculations/metrics/values presented are based off of the information that you provide about, your specific property. This is why it is important that you be conservative with your speculative purchase prices, renovation costs, etc. MogulMind takes these conservative estimates and plugs them into industry standard, time tested formulas for real estate evaluations: Cash-on-Cash Return, Cap Rate, Internal Rate of Return (IRR), Return on Investment (ROI), and Appreciation.

Note:
We want MogulMind to be more than just a calculator; it should be a deep resource to use at any stage of your investing career. So how do we arrive at all these values? It’s one thing to read a formula on Investopedia, it’s another thing altogether to see how your data gets plugged into the formula.  If you’re new to investing and wish to learn more about these calculations, or simply want to know how we’re using your data,  simply click just about any value for a summary. For example, clicking Cash-on-Cash in the rental view:

Metrics provided in MogulMind are clickable: Click one to see the calculation used to get the value.

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The Fantastic Five

Let’s call them the Fantastic Five: 

  1. Cash-on-Cash Return
  2. Cap Rate
  3. Internal Rate of Return (IRR)
  4. Return on Investment (ROI)
  5. Appreciation. 

These are the most common and important metrics used to evaluate investment properties. We will be discussing them and why it is important for you to understand them and how they can affect your success. You may be familiar with them, but do you understand why they are significant? Fortunately, you’ve got MogulMind to run the calculations, but as a real-estate investor, it is essential that you understand what they mean and how they can impact your real estate business.

We’ll begin with Appreciation and Return on Investment (ROI). Cash-on-Cash, Cap Rate, and Internal Rate of Return will each be discussed in future articles in this series.

It’s very easy to digest your projected future values in MogulMind.

Real Estate Appreciation is the increase in the value of property over a period of time. There are many factors that determine real estate appreciation, all of which are out of your control. Supply-and-demand, location, the economy, inflation, natural disasters, and the market. You can project appreciation, but it’s just an estimation. Don’t bank on it. The first step is to estimate future growth in the form of the appreciation rate. Zillow is one platform that can show you the predicted growth rate, current and historical. Once you have determined the future growth, you can move on to the second step. With your speculative appreciation rate in hand, you simply multiply and compound the current value for each year in your window speculation. This will give you the property’s future value. Real estate appreciation is important for investors that intend on selling their property several years later (typically 5 or more) after prices have risen significantly.

Return on Investment (ROI) is a measure used to evaluate the overall efficiency and performance of an investment property. ROI is a ratio of the money made money invested. It’s simple: you take your net profit and divide that by the total invested. Because of its simplicity, it’s often the bottom-line metric used to evaluate an investment property. Many real estate experts consider the ROI the most important number.

Stick with us! Stay Tuned~ Our next post will discuss the ever-important Cap-Rate for RE Investments.

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If It’s Not A Deal, It’s Not A Deal

I’ve seen it over and over again. An investor falls in love with an investment property, the numbers don’t work and the seller won’t budge on price or go any lower but the investor has become attached to the idea of that property in their portfolio. Or maybe it’s because inventory is low and the investor is struggling to find their next project. Whatever the reason, don’t do it! Know when to walk away. This is where MogulMind comes to the rescue with its personalized advice on potential real estate investments. MogulMind will flat out tell you “this is not a good deal” and it will even explain why it’s not. Real estate investing is fun but not when you’re losing money. Buyers remorse is not fun. When it comes to your real estate investments, your decisions should be objective and data-driven, not based on emotion or instincts. MogulMind gives you the data. It is here to help you evaluate potential investment property purchases and make better investment decisions. It provides insight into real estate investments and helps to increase your ROI.

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Flip… or Flop?

Let’s say you are evaluating a potential flip with MogulMind. Did you know that MogulMind goes through every single one of the numbers needed to evaluate the property with a fine tooth comb from purchase to sale? It will tell you what the current value of the property is, it will then analyze the purchase and the renovation. In the renovation analysis it will even tell you if your renovations are costing more than they should and will ask you to take a closer look at things like “are the prices you’re paying competitive?” and “are all of the repairs necessary?”. Then it will analyze your exit strategy. If you’ve entered an unrealistic sales price, it’s going to tell you. It will say, look, you might be setting your sights a bit too high for this property, your sales price is __% more than we’d expect it to sale for.

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Rental Evaluations

Maybe the deal you need to analyze is a potential rental property. You’ll need to account for the appreciation, rental income, rent price escalation / increases, loan payments, loan payoffs at the time of sale, and closing costs. MogulMind is going to take care of all of this for you. It’s going to take an in-depth look at ROI, appreciation, IRR (Internal Rate of Return), cash on cash, cap rate, OER (operating expense ratio), the current value, sales profit, projections, and cash flow advice. Whew – that’s a lot. But, no worries because MogulMind’s got it covered. It’s going to analyze every single number. And don’t forget, MogulMind gives personalized advice. For example, it might advise you of something like, “your monthly rental income is $____ below the 1% goal (to earn 1% of the purchase price, per month, via rent income)”. Or, it might give you a pat on the back like, “Awesome! You have a positive cash flow of $_____ per month”. How great is that? It gives positive feedback too.

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Mystery Properties

Sometimes, we come across potential investment properties that we really like and the price is good but you aren’t sure what to do with it. Easy, you’ve got MogulMind to help you compare multiple scenarios and see which scenario will give you the biggest bang for your buck. MogulMind makes it easy to build and compare multiple scenarios for a single property. So maybe you want to take an in-depth look at a potential investment property as a rental, a total renovation flip, and as a minor (or cosmetic) renovation flip. MogulMind is going to intelligently evaluate each one and give it a score letting you know which will give you the best ROI. All in less than a minute.

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We investors are people and people sometimes make emotional or instinctual decisions when our decisions should be objective and data-driven. MogulMind gives you the data and individualized advice. It makes it easy for you to make better real estate investment decisions.

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MogulMind Picks Up Where The CMA Leaves Off

As real estate professionals, the CMA (Comparative Market Analysis) is the foundation of our investment property research. However, it doesn’t paint the entire picture for an investment property. The purchase price is one thing, but the ROI is what you’re after. 

For most of us, determining the ROI means gathering property information, breaking out the spreadsheets and struggling with formulas. This process is time consuming and tedious to say the least. The excitement of finding a potential deal can easily get lost in the frustration of dealing with unnecessary complications.

Provided by MLS, other listing services, Included in MogulMind

  1. Property Details (# Bedrooms, # Baths, Lot Size, Year Built, etc)
  2. Property Photos
  3. Description
  4. Listing Price

MogulMind Only: 

  1. Automatic Comps
  2. ROI
  3. Project Cash Flow, Cash-on-Cash (and more) for Rentals
  4. Costs for renovations, Holding & Loan Costs (and more) for Flips
  5. Quickly evaluate alternate investment scenarios

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MogulMind is Quick and Easy

Investors, have you ever lost a deal because you weren’t able to make a decision fast enough? Well, you don’t have to worry about that anymore because MogulMind’s evaluation tools make it easy for you to get the numbers quickly. Literally in seconds. MogulMind’s magic does the number crunching for you, allowing you to make smarter choices faster. Imagine that you are looking at the nutritional facts on a box of cereal. You compare it to the many other options for sale. It makes it easy to choose the cereal that has the health benefits you’re looking for. Our evaluations allow you to do exactly that. We provide you with the nutritional facts for your potential real estate investments.

Compare Investment Scenarios for a Property

Decisions, Decisions: Should you hold it or flip it? MogulMind makes it easy to build and compare multiple investment strategies. It’s intelligent investment evaluations will even provide you with personalized advice. It gives each strategy a score letting you know which one provides the best ROI. Again, allowing you to quickly make your investment decision based on intelligent evaluations.

Whether it is a flip or a rental property, MogulMind provides an easy to read and understand breakdown from the beginning of your project to the end. For your flips: expenses from start to finish including loan payments, points, interest, repairs, commissions, closing cost, insurance, etc. For your rental properties: appreciation, rental income, rent increases, loan payments, loan payoffs, cash flow analysis, advice, projections, and more.

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Share Away

When you are ready to share the investment property information with your clients, lenders, and business associates, you have an easy-to-understand evaluation with attractive graphs and charts to back up your numbers.

And don’t forget, with MogulMind you can build a beautiful cloud based portfolio for all of your rentals and flips. It’s fun, easy, and sure to impress.

Real Estate Agents

We certainly did not forget about you. This software was designed for you to sell more investment properties! Investor’s want to see the investment value, not just the MLS listings. You need to be able to provide your Buyer’s with their ROI quickly before they move on to the next deal. Comps are obviously a necessity for all real estate evaluations and transactions (especially important on investment properties) and of course are included in MogulMind’s evaluations but, they are just the starting point. Sharing through MogulMind’s powerful Scenario Pools allows you to group and share different scenarios with one or more clients. Do you have a real estate investor that you have found multiple properties for? If so, you can create a Pool for them which makes it very easy and convenient for them to compare all of the different properties of interest. You can also group properties together for similar investors. For example, if you have found a few potential investment properties for your clients in a hot zip code, you can create a Pool for them and share the Pool with all of your clients that are interested in that area. It’s easy to send beautiful HTML formatted emails with previews of all of the investment scenarios in the Pool. Of course, you can also just share the Property Pool with a link. We’ve got you covered!

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Welcome to the MogulMind Blog!

Greetings, Internet! We are the core MogulMind team, comprising software and real-estate professionals, operate out of San Diego, California, where the sun is always shining, and the houses are always expensive (haha!). We have recently released v1 of our product to the public, and would like to introduce our product (and ourselves) to our users. This blog will be a place to share industry tips to become a better real-estate investor, as well as updates on our product features, and what the future holds for MogulMind.

Continue reading “Welcome to the MogulMind Blog!”