Understanding deal analysis

Learn how to analyze a deal in Invelo

Deal analysis is essential in understanding the financial outcome of any real estate investment, and Invelo makes this process seamless. Using Invelo’s deal information form, you can input the actual purchase details, costs, and sales information of a deal. Once this data is entered, Invelo automatically calculates your realized profit and return on investment (ROI). This allows you to quickly assess the success of your investment and gain insights for future opportunities. Whether you're a seasoned investor or just starting out, Invelo simplifies the evaluation process, helping you understand the true financial impact of your deals.

Accessing the Deal Info Form

1. Go to Pipelines and select Deals.
   
2. Open a property record by clicking on it.
   
3. In the property record view, navigate to the Deal tab to access the Deal Info Form.
   
4. Complete the form with the following details:
   
   • Deal Type
   • Purchase Price
   • Closing Date
   • Closing Agent
   • Terms
   • Construction Costs
   • Holding/Other Costs
   • Construction Notes
   • Sale Price
   • Closing Date
   • Buyer
     
5. Once the form is complete, click on the Analysis button to view the Deal Analysis. This section provides insights such as:
   • Profit
   • Holding Time (days)
   • Profit Per Month
   • Profit from Sale Price
   • Return on Investment (ROI)
     
     

Here's how each metric provides valuable insight into real estate deals:

1. Profit: This is the net gain from the deal after deducting all expenses (like acquisition, construction, holding, and closing costs) from the sale price. Knowing the profit provides a clear picture of the financial success of each deal.

2. Holding Time (days): This measures how long the property was held from acquisition to sale. Shorter holding times often mean lower carrying costs (like taxes, insurance, and maintenance), which can increase profitability. It also helps assess the speed at which deals can be executed, allowing for better planning of future investments.

3. Profit Per Month: By calculating profit on a monthly basis, this metric helps you understand the efficiency of each investment. It’s useful for comparing deals of varying durations, giving a clearer sense of performance regardless of holding time.

4. Profit from Sale Price: This shows the gross profit margin by indicating what portion of the sale price is profit. It highlights how much value has been added to the property, whether through market appreciation or improvements, giving insight into the overall success of your investment strategies.

5. Return on Investment (ROI): ROI is a percentage that represents the total profit in relation to the total invested amount. It's one of the best measures of deal success because it standardizes returns, allowing you to compare different deals regardless of size. A higher ROI generally indicates a better-performing investment.

Each of these metrics provides unique and valuable insights, helping you evaluate both the performance of individual deals and your overall real estate strategy.