We all know that time is of the essence when it comes to real estate investing. However, you also don’t want to rush into putting an offer in a deal without doing your due diligence. There is a delicate balance between doing enough research to feel confident in your decision to put an offer in on a property and losing out on a deal because you took too long to put your hat in the ring. Finding that balance can feel like walking a tight rope at a Cirque du Soleil show. A bad deal that wasn’t properly analyzed can lead to lots of money down the drain. On the other hand, a slow response to a broker can cause you to lose out on a deal.

I used to personally underwrite every deal that came my way when I first started actively investing in multifamily. Often times, a deal would get snapped up so quick I wouldn’t even have time to finish doing my analysis before it would be off the market. Now, our team at EZ Real Estate underwrites hundreds of deals each year. Even before we got to that scale though, it became clear that we would need the right tools in order to accelerate our underwriting and jump on the right opportunities when they came out as winners. If you’re looking to step up your underwriting game and move faster, here are the top 5 online tools we recommend (and personally use) to get the job done:

​​1. RedIQ

What does it do?

RedIQ is essentially a data processor and analyzer. It takes typically messy and non uniform inputs, such as rent rolls and chart of accounts, puts it into a standardized, easy to use format, and calculates commonly sought after metrics like median rent.

What’s the advantage to using it?

We feed the property’s rent roll and T12 (12 month profit and loss statement) through the RedIQ tool and generate a standardized data set that we can then input into our underwriting analysis tool. As you may have experienced, this kind of data NEVER comes in a standardized format. We used to spend hours inputting each monthly rental amount manually into our model, which of course netted in a lot of human error. Now, we can get a standardized output and key metrics like min and max rent in 5 minutes flat.

2.  Yardi Matrix and CoStar Reports

What does it do?

Both Yardi Matrix and CoStar support the process of conducting market analysis and comps (comparables) for particular markets across the US. If you’ve ever scoured the internet for key market metrics like median income, population growth, or comps for a specific property, you know it can be difficult to find comprehensive and trusted sources of data. Yardi Matrix and CoStar are the leaders in compiling and reporting granular, verified, commercial real estate market analytics.

What’s the advantage to using it?

Both of these platforms allow us to pull critical market and property specific data that is almost impossible to find elsewhere. We get data such as new constructions in the pipeline, market population growth, median income, historical rental data, future projections and comparables for a specific property. All of these are used to paint a picture of whether a deal is a good investment for us as we undergo the underwriting analysis.  Identifying comps alone can take up to 4 hours. We were able to cut our time spent on preliminary underwriting with some of these basic inputs down to 20 minutes. If you’re doing 30 deals a month, that’s a savings of 50 hours PER MONTH! Yes, the price is going to be difficult to swallow at first. But once you get to that level, remember, one hour can mean the difference between getting a deal closed and losing it.

3. Trulia

What does it do?

Trulia is an online platform that lists houses for sale and rent, but it offers much more than just listings. Trulia also has detailed information about neighborhoods, such as crime rates, how good the schools are in the area,  walkability, proximity to grocery stores and much more.

What’s the advantage to using it?

 It can be difficult to get a picture of what a block in a neighborhood is truly like unless you go visit it in person. Trulia allows us to get a pretty good picture of how attractive a property might be based on its location without having to see it in person right away. We also love it for its crime stats. It used to be you had to comb through police reports to see if any violent crimes were often committed in the area. Now we can get this info in under 5 minutes.

4. Evernote

What does it do?

Evernote is essentially a digital notebook that lets you easily capture anything and everything you might want to remember and share it easily with others. You can capture notes from a meeting, copy and paste a link from a site you want to save, and even add screenshots or photos to notes to keep track of an experience. Evernote can be accessed via a browser or you can download the app on your phone or iPad and your notes are synced between all of your devices. So no matter what device you’re using, you can always have access to your notes. Plus there’s a great sharing feature that allows you to easily share your notes with anyone on you want.

What’s the advantage to using it?

Before, we used to shoot off emails or texts to team members when we wanted to share information with them quickly. I would be at a property tour and wanting to provide details to my team who weren’t there about how the property was looking, some of the data I got from the broker,  or even photos of the area. Information would be all over the place and often get lost in the sea of emails and texts. Now, I take the notes in my Evernote app on my phone and share the notes with the team members that it is relevant to. They are able to instantly see the information and start using it in their underwriting process so we can be working in parallel.  It has been a game changer for streamlining our communications and efficiency as a team.

5. Google Sheets or Excel

What does it do?

Excel (and the free Google version that we tend to use, Google Sheets), are powerful spreadsheet applications which help organize and analyze data. These tools can be used for building models and formulas to perform complex calculations, such as the ones that are typically done in the underwriting process. Both tools are cloud based meaning just like Evernote, you can update the information on your phone or laptop and everyone who has access to the file will see the updates immediately.

What’s the advantage to using it?

Our underwriting formula and model is built in Google Sheets. We simply make a copy of the template and fill in the necessary information for each property. The great thing about having a templated model is that you can set default values (such as insurance costs, taxes, rent growth, investor return splits, etc) for a market and then just use that template for every property you underwrite in the market. Following this methodology has saved us from tweaking formulas for at least an hour to generating an initial analysis from about 12 inputs in 15 minutes.

We also take advantage of the cloud capability when on property tours. Similar to Evernote, we can open up the Google Sheets app on our phone or laptop and add a comment or input field which is then automatically updated for anyone with access to the document. Our team can get to work on conducting analysis with inputs they get on the fly instead of waiting for whoever is on the tour to get back and write it down in an email or send a file.

 While an hour here or there might not seem like a lot of time when you are first starting out, once you begin to scale up and conduct several underwriting analysis per day or week, they add up fast. Remember, a savings of 45 minutes per analysis can net almost 8 hours of time saved over 10 deals. That’s almost an entire day’s work. Some of these tools might give you a bit of sticker shock, but even if they help you to move faster on one deal per year, the ROI will be there. Remember, investing starts at the analysis stage, not just when you close the deal.